RBI: Established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934 .

Central Office at Mumbai since inception Though originally privately owned, since nationalisation in 1949, fully owned by the Government of India The Preamble prescribes the objective as: "to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage." Functions: Note Issue Banker to Government Bankers Bank Custodian of Exchange Reserves Controller of Credit Ordinary Banking Functions Promotional & Developmental Functions

ROLE OF COMMERICAL BANKS Capital formation Generation of Savings Mobilization of Savings Canalization of Savings in productive uses Encouragement to Entrepreneurial innovations Monetization of Economy They buy debts & in exchange, create Demand Deposits Convert Non-Monetized sectors into Monetized sectors by spreading their branches in rural & backward areas. Influencing Economic activity through: Rate of Interest Availability of Credit Implementation of Monetary Policy Control & Regulation of credit by the monetary authority is not possible without the active co-operation of the banking system in the country. Promotion of Trade industry Regional Development Development of Agricultural & other neglected sector MEANING OF BANK Meaning of Bank An Institution having the following features: It deals with money; it accepts deposits & advances loans It deals with credit; has the ability to create credit Its a commercial organisation; its aim is to earn profit It is a unique financial institution that creates demand deposits which serve as a medium of exchange &, as a result, the banks manage the payment system of the country.