Reserve Bank of India Act, 1934

Act 1934

Effective: 6 Mar 1934

Plain-English summary

The Reserve Bank of India (RBI) Act, 1934, passed on 6th March 1934 and enforced from 1st April 1935, is still alive as the top-most legal foundation of central banking, monetary stability, and financial regulation in India. The Act confers upon the RBI the sole legal authority to print currency notes, manages the foreign exchange reserves of India, and uses the Monetary Policy Committee to control inflation through repo rate changes. With the help of enormous powers in Chapters III-B and V, the legal instrument helps the RBI to authorize and regulate commercial banks, impose stringent scale-based risk management for NBFCs, punish non-compliance with regulations, and incorporate the emerging modern finance systems like CBDC (e₹).

Who it applies to

Banking · NBFC / Non-bank Lending

Topics

Prudential & Capital

Official source

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