Reserve Bank of India (RBI) is the central banking institution of India, responsible for regulating the issuance and supply of the Indian rupee and managing the country’s monetary policy. Established on April 1, 1935, under the Reserve Bank of India Act, 1934, it plays a vital role in maintaining financial stability and promoting economic growth.

The RBI’s primary function is to ensure price stability while supporting economic development. It regulates banks and non-banking financial institutions, controls credit flow, and manages inflation through tools such as the repo rate, reverse repo rate, and cash reserve ratio (CRR). These instruments help balance liquidity in the market and influence borrowing and lending rates across the financial system.

Another crucial role of the RBI is in managing foreign exchange reserves and ensuring stability in the Indian currency exchange rate. It also acts as the issuer of currency notes and ensures an adequate supply of clean and secure currency in circulation. Additionally, the RBI functions as the banker to the government and the lender of last resort for commercial banks.

To enhance digitalization and transparency, the RBI has been actively promoting initiatives such as Unified Payments Interface (UPI), digital rupee pilots, and financial inclusion programs to bring more citizens into the formal banking ecosystem.

In essence, the Reserve Bank of India serves as the cornerstone of India’s financial system. Its policies directly impact inflation, interest rates, and overall economic stability, making it one of the most influential institutions shaping the nation’s monetary and fiscal landscape.