Why is it said that the Reserve Bank of India emerged in British India?

         The Reserve Bank of India was founded on April 1, 1935, constituted under the Reserve Bank of India Act 1934. It was a shareholder’s bank then, and remained so until its nationalization in 1949. It has been fully owned by the Indian government ever since.

         It was the financial troubles caused by the First World War that led to the establishment of the Reserve Bank. It is believed that the British were forced to transfer the responsibility of central banking to Indian hands, due to financial, as well as political reasons.

          The main idea behind the formation of the bank was to make it a regulatory body to issue banknotes, and to secure the country’s monetary stability. It also operated the currency and credit system, and still continues to do it.

           The bank was established on the recommendation of the Hilton-Young Commission. The first logo of the bank was inspired from the East India Company’s double mohur.

           Did you know that the bank was also the currency issuing body for countries like Burma and Pakistan? Till 1942, the Reserve Bank issued currencies to Burma, today’s Myanmar. It was also the banker to the Government of Burma till 1947. The following year, in 1948, the RBI stopped rendering currency notes to Pakistan too.