---
title: "Reserve Bank of India (RBI): Role & Powers | Model Diplomat"
description: "The Reserve Bank of India (RBI), established in 1935, regulates India's banking system and sets monetary policy, crucial for UPSC candidates and economists."
url: "https://modeldiplomat.com/learn/glossary/reserve-bank-of-india"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- The Reserve Bank of India is India's central bank, established in 1935, responsible for monetary policy, currency issuance, and regulation of the banking and financial system.
- What is the legal basis for the RBI's monetary policy mandate?
- How does the RBI differ from SEBI?
- Can the government override the RBI?
- Who owns the Reserve Bank of India?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

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## Timeline

1. 1 April 1935

   The Reserve Bank of India (RBI) is the central bank of the Republic of India, constituted under the Reserve Bank of India Act, 1934, and commencing operation…

2. 1 January 1949

   Following the Reserve Bank (Transfer to Public Ownership) Act, 1948, the institution was nationalised on and became wholly owned by the Government of India.

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In February 2023, the Reserve Bank of India's Monetary Policy Committee under Governor Shaktikanta Das raised the repo rate by 25 basis points to 6.50 percent to anchor inflation within its 2–6 percent tolerance band.

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