CSEET · Economic and Business Environment · Key Government Institutions
The Reserve Bank of India was established under which of the following Acts, which still governs its core central banking functions?
The RBI was established under the Reserve Bank of India Act, 1934, which provides for its constitution, management and central banking functions such as note issue. The Banking Regulation Act, 1949 only regulates banking companies and did not create the RBI.
- ABanking Regulation Act, 1949
- BReserve Bank of India Act, 1934Correct
- CForeign Exchange Management Act, 1999
- DCompanies Act, 2013
Explanation
The RBI began operations in 1935 under the Reserve Bank of India Act, 1934, which sets out its constitution and central banking powers such as note issue and credit control. The Banking Regulation Act, 1949 is a separate law for regulating banks, so it is not the establishing Act.
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