India's central bank, set up on 1 April 1935 under the RBI Act 1934 and nationalised in 1949, which runs monetary policy, issues currency, regulates banks and payment systems and manages foreign exchange.
The idea of a central bank for India came from the Hilton Young Commission (Royal Commission on Indian Currency and Finance, 1926). The Reserve Bank of India Act was passed in 1934, and the Bank opened on 1 April 1935 as a shareholders' bank headquartered in Calcutta; its central office moved to Bombay in 1937. Its first Governor was Sir Osborne Smith, and C. D. Deshmukh became the first Indian Governor in 1943.
After Independence the government nationalised the Bank with effect from 1 January 1949, so that it could serve national development goals. Over the following decades its role widened: the Banking Regulation Act 1949 made it the main supervisor of commercial banks; the bank nationalisations of 1969 and 1980 made it a partner in directed credit; and the reforms after 1991 shifted it towards market-based tools. The 2016 amendment to the RBI Act created a statutory Monetary Policy Committee (MPC) and a flexible inflation-targeting framework, which is the single most important change in its modern history.
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