The Role of Reserve Bank of India in the Banking Sector

This research paper analysis the role of Reserve Bank of India in regulating the Indian banking sector and stabilizing the Indian financial market. RBI was established in 1935 as the legal guardian of all Indian banks. It evolved from colonial rule period to present day central bank which oversee overall development and financial and monetary status in the country. During the evolution, many acts were introduced for advancement and efficiency of the sector. This research paper discusses about the monetary policy tools for the issuance of currency in the country, the core functions of the guardian of all the banks and the regulatory bodies which governs the Reserve Bank of India and ensures its stability, functioning and international standards. Further, it discusses about how the RBI supports Indian banking sector in their transformation through digital payments and how RBI regulates loans and deposits in the banking sector. Reading further, the readers come to know about the impact of Monetary Policy Committee in banking sector. At last, the paper provides the analysis on the challenges currently facing by the RBI in performing its roles in the banking sector and the future outreach to overcome the challenges.