Reserve Bank of India Birthday Wishes: Thus, the new year starts from 1 January. But the new year related to people’s pockets and earnings is starting today i.e. from 1st April. Not only this, other big decisions related to money also started from today. We are talking about the establishment of the Reserve Bank of India (RBI), which has been functioning since the British era. There was a time when this bank looked after the banking system of three countries. This central bank has pulled India out of major challenges four times since independence. Today we are giving you complete information about this journey and struggle of the Reserve Bank i.e. RBI.
RBI, earlier known as Mint Street, has completed 90 years today. The Central Bank for British India was established on 1 April 1935 on the recommendation of the Hilton Young Commission. At the time of establishment of this bank, three major responsibilities were imposed on it. Its main functions were to regulate notes issued by banks, oversee reserves and credit to the economy, and control the currency system.
Offices opened in other countries
With the establishment of the Reserve Bank, branches were opened in Calcutta, Bombay, Madras, Rangoon, Karachi, Lahore and Kanpur. Banking departments were also opened in Calcutta, Bombay, Madras, Delhi and Rangoon. Burma or Myanmar became independent from the Indian Union in 1937, after which the bank continued to function as the central bank of Burma until 1947. After that RBI functioned as the Central Bank of Pakistan till 1948.
RBI has created many institutions
After independence, RBI started working fully for India from 1 January 1949. Subsequently it was notified as the Reserve Bank of India Act, 1948. As soon as it came to power, the Reserve Bank established many big institutions. Prominent names include Deposit Insurance and Credit Guarantee, Corporation of India, The Unit Trust of India, The Industrial Development Bank of India, National Bank of Agriculture and Rural Development and Rate Discount and Finance House of India.
The first major challenge came in the year 1991
The first major challenge before the RBI was regarding foreign exchange reserves, which started in 1991. The fiscal deficit had increased significantly and the economy had completely collapsed. Besides, India’s expenses also started increasing due to the Gulf War. And there came a time when India had money left only for two weeks of imports. To deal with such a situation, India had to import 47 tonnes of gold from the Bank of England and 20 tonnes of gold from the Union Bank of Switzerland.
Cash crisis came again
After the Great Recession of 2008, countries around the world were progressing rapidly. Then in 2013, India faced a currency crisis. At that time the value of the Indian currency was falling rapidly. To avoid this, RBI had to open a special swap window. Foreign currency was purchased through this window at concessional rates and the position of the rupee gradually improved. A total of $34 billion worth of foreign currency was to be purchased at a concessional rate of 3.5 percent.
Big shock of Corona epidemic
The biggest challenge among all these challenges was the Corona epidemic spread by the Covid-19 virus. The pandemic devastated economies around the world in early 2020. Due to which some countries have still not been able to come out. Reserve Bank Governor Shaktikanta Das also said that this has brought the biggest economic disaster of 100 years. To deal with this, RBI had to issue many relief packages including low interest loans, loan moratorium.
