RBI was born on this day, its decisions were applicable to 3 countries including Pakistan.

highlights

This bank used to monitor the banking system of three countries.

The central bank pulled India out of major challenges four times.

RBI which was earlier known as Mint Street.

New Delhi. Although the new year starts on January 1, but the new year related to people's pockets and earnings starts today i.e. from April 1. Not only this, another big decision related to money started from today itself. We are talking about the establishment of Reserve Bank of India (RBI), which has been working since the British era. There was a time when this bank used to monitor the banking system of three countries. Since independence, this central bank has pulled India out of major challenges four times. Today we are giving you complete information about this journey and struggle of the Reserve Bank i.e. RBI.

RBI, which was earlier known as Mint Street, has turned 90 years old today. On April 1, 1935, the Central Bank for British India was established on the recommendation of the Hilton Young Commission. With its establishment, three responsibilities were imposed on this bank. Its main tasks were to regulate the notes issued by banks, monitoring the reserves for the economy and regulating the debt and currency system.

VIDEO | Here’s what PM Modi (@narendramodi) said while speaking at the RBI@90 ceremony in Mumbai.

“India’s economy and GDP are dependent on the coordination between monetary and fiscal policies. The situation was completely different when I came to attend the 80-year ceremony of… pic.twitter.com/4wFldQl2NJ

— Press Trust of India (@PTI_News) April 1, 2024

Offices opened in other countries
With the establishment of the Central Bank, its 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 i.e. Myanmar became independent from the Indian Union in 1937, after which this bank continued to function as Central Bank of Burma till 1947. Not only this, RBI worked as the Central Bank of Pakistan till 1948.

RBI created many institutions
RBI started working completely for India after independence from January 1, 1949. Then it was notified as the Reserve Bank of India Act, 1948. As soon as it came to power, the Reserve Bank established many major institutions. In this, names like Deposit Insurance and Credit Guarantee Corporation of India, The Unit Trust of India, The Industrial Development Bank of India, The National Bank of Agriculture and Rural Development and Rate Discount and Finance House of India are prominent.

VIDEO | “The Reserve Bank’s evolution as an institution has been closely intertwined with the development of the Indian economy. From being a central bank primarily concerned with the allocation of resources during the planning period, the Reserve Bank has transitioned into being… pic.twitter.com/Wk4kuFsvV5

— Press Trust of India (@PTI_News) April 1, 2024

The first big challenge came in 1991
The first major challenge before the RBI came with the issue of foreign exchange reserves, which started in 1991. The fiscal deficit had increased significantly and the economy was under complete pressure. On top of that, India's expenses were also increasing due to the Gulf War. There was a time when India had only money left 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, when countries around the world were progressing rapidly, India faced a currency crisis in 2013. At that time the Indian currency was falling rapidly. To avoid this, RBI had to open a special swap window. Through this window, foreign currency was purchased at concessional rates and gradually the condition of the rupee improved. A total of $34 billion worth of foreign currency had to be purchased at a concessional rate of 3.5 percent.

Corona epidemic shocked
The biggest of all these challenges was the Corona epidemic spread by the Covid-19 virus. This challenge, which came in the beginning of 2020, devastated the economies around the world, from which many countries have not been able to recover till date. Reserve Bank Governor Shaktikanta Das had also said that this has brought the biggest economic tragedy in 100 years. To deal with this, RBI had to issue many relief packages including loans at low interest, loan moratorium.

Banks were on the verge of collapse
The fourth biggest problem faced by RBI was related to bad loans. From 2008 to 2010, banks distributed loans very carelessly and their money got stuck. Funds worth lakhs of crores became bad loans. Then RBI started its recovery by putting this money in non-performing assets. In 2015, the then Governor Raghuram Rajan asked all banks to disclose NPAs and the real picture of the Indian banking sector was exposed. At one time NPA reached 12.5 percent and many banks were on the verge of collapse. Then RBI placed 12 banks under prompt action and their loan distribution was banned. At present the participation of NPA has reduced considerably.

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