Question

In which year was the RBI nationalised?
1. 1971
2. 1956
3. 1949
4. 1935

Answer 1

Correct Answer - Option 3 : 1949

The correct answer is 1949.

• RBI was nationalized in the year 1949.

• ​Reserve Bank of India (RBI):
  • RBI was set up on the basis of the Hilton Young Commission recommendation in April 1935, with the enactment of the RBI Act, 1934.
  • It was nationalized on the basis of the Reserve Bank of India (Transfer to Public Ownership) Act, 1948.
  • Its first Governor was C.D. Deshmukh.
  • The headquarters of RBI is in Mumbai.
  • Current governor of RBI is Shaktikanta Das.

• Quantitative/General Credit Control
  • The quantitative credit control consists of:
    • Bank Rate:
      • It is also called the rediscount rate. It is the rate, at which the RBI gives finance to commercial banks.
    • Cash Reserve Ratio (CRR):
      • The RBI (Amendment) Bill, 2006, empowers RBI to prescribe CRR–Cash that banks deposit with the RBI without any floor rate or ceiling rate.
    • Statutory Liquidity Ratio (SLR):
      • It is the ratio of a liquid asset, which all commercial banks have to keep in the form of cash, gold, and unencumbered approved securities equal to not more than 40% of their total demand and time deposit liabilities (ranges is 25‑40%).
    • Repo Rate:
      • It is the rate, at which RBI lends short-term money to the bank against securities.
    • Reverse Repo Rate:
      • It is the rate, at which banks park short-term excess liquidity with the RBI.
    • Open Market Operations (OMOs):
      • Under OMOs, the RBI sells G-securities in the market.
• Quantitative credit controls are used to control the volume of credit and indirectly to control the inflationary and deflationary pressures caused by expansion and contraction of credit.