The Reserve Bank of India was established on 1 April 1935 in accordance with the provisions of the Reserve Bank of India Act of 1934. RBI is the central bank of India. The aim of the central bank is to regulate financial institutions to ensure economic stability and growth in India. Reserve Bank of India uses monetary policy to create financial stability in India and is responsible for regulating the country's money and credit systems.
The Reserve bank of India is governed by a board of directors appointed by the government. The board of directors elected by the Indian government serves for 4 years. RBI was first established as a private organization in 1935 and then nationalized in 1949. Since 1949 the Reserve Bank of India belongs to the Indian government. The Central Bank of India has offices in 31 locations, headquartered in Mumbai.
•Regulates monetary policy
•Determination of audit processes in which financial institutions are responsible
•Supervision of regulated financial institutions
•Supervision of the overseas activities of banks
•Guiding financial institutions to prevent financial crimes (AML-CFT Regulations)
•Giving licenses to financial institutions to be established in India
•Ensure the growth and stability of the Indian economy
•Ensuring confidence in the economy of the citizens
•Providing cost-effective banking services to its citizens
•Facilitate foreign trade
•Prevention of all financial crimes such as money laundering, terrorist financing, and corruption
Financial crimes are a big problem in India as in the whole world. Every year millions of dollars are laundered through financial systems. These financial crimes have great damages to the economy. The Reserve Bank of India aimed to prevent financial crimes like other countries. Reserve Bank of India aims to control financial institutions with AML-CFT regulations. Large fines and sanctions are imposed on financial institutions that do not comply with the regulations.
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