RBI Act, 1934

Under the RBI Act of 1934, the Reserve Bank of India was established in1935. The central office of the Reserve Bank of India was first established in Kolkata. In 1937 it was established in Mumbai in its permanent form, and it also extends to the whole of India. In 1936, this act and the companies act were meant to provide a structure for the overseeing of banking firms in India. The RBI Act, 1934  gives the lawful ground of the functioning of the Bank, which started operations on April 1, 1935. In 1949, the bank, which was basically built up as shareholders banks, was nationalised.

RBI Act 1934

In RBI Act 1934, the Bank is called Reserve Bank of India, which was established by this act plus the Bank of the international statement was made by the body of corporate construct with the said name by the law of Switzerland.

It is mentioned in RBI Act 1934 that under RBI Act 1934, the Bank should be called the Reserve bank of India, which should be established for the motive of taking over the management currency from the central bank and taking the business of banking in line with the provision of this act.

In this, the meaning of central board of directors of the bank is the central board, the meaning of deposit insurance corporation is deposit insurance corporation, which established under section 3 of the deposits insurance act, 1961, export-import bank of India act means Exim bank, foreign exchange regulation act 1973 has assigned the meaning to foreign currency and foreign exchange.

Rupees which are the legal tender, mean rupee coins under the arrangements of the Indian coinage act.

In 1934, banks included in the second schedule were called the scheduled bank, small industries development bank of India is known as small industry bank under the state bank of India act, Unit trust of India means a unit trust, built under the section3 of the unit trust of India act, 1963. National bank for agriculture and rural development act 1981 has given separate meaning to agriculture operation, central cooperative bank, co-operative society, crops, marketing of crops, pisciculture, regional rural bank, and state co-operative bank.

Under RBI Act 1934, a person who is a salaried government official, a fund nutter or disturbed with the mind, and an officer or an employee of any bank has no right to become a director or be a member of a local board.

And also the ones who are the partner in an actual trade and commerce related firms, or from that trade and commerce firm in which the other is a partner.

For the Four areas specified in the first schedule, the local board should be established. And among the member of the local board, one will be a chairperson of the board. The chairperson is selected among the member of the local board with everyone approval. The central board gets advice from the local board, specifically related to the local board, and the person the duties delegated by the central board.

The prologue of RBI Act, 1934

The prologue of the act mentioned the objective of RBI is to:

1. Set the matters of banknotes.
2. Set off the currency and credit system of the country to its benefit.
3. Keep the reserves with the view to security monetary firmness in India.

Issue functions

• The main key function of RBI is to issue banknotes, which was performed by the issue of the department which kept a full clear cut from the banking department.
• The torn or disfigured notes that can be exchanged in one of the functions are a matter of grace but not a matter of right in the RBI Act, 1934.
• Payment of stamp duty is not permitted on banknotes that RBI issues.
• The central government approves the design, form and material of book notes and gets a recommendation from the central board.

 Second schedules of RBI Act, 1934

In the RBI Act, 1934, schedule banks are the banks that are listened to in the second schedule. Under this schedule, the banks should raise at least Rs 5 lakhs and capital. The banks added in the second schedule are known as scheduled banks, and these banks include scheduled cooperative banks and scheduled commercial banks. Scheduled banks comprise five non-similar groups, and scheduled commercial banks are urban cooperative banks and state cooperative banks.

Some important sections of the RBI Act 1943-

The RBI Act 1934 is of very much importance. There are many reliable sources on the internet that can be used to gather information about the same such as RBI Act 1934 pdfs. Also, the students appearing for competitive examinations can solve RBI Act 1934 MCQs available on the internet.

The important sections of the act are mentioned below:

Repo, reserve, derivative, money market instruments and securities are defined in section 45(u).

• Withdrawal of legal tender notes comes under section 26(2).

• Government businesses are transacted on agreement by RBI, and this comes under section 21A
• The business that RBI can carry outcome under section 17.
• Initiation and incorporation of reserve banks come under section 3.
• Demonetisation of notes comes under section 24.
• The re-issue of notes comes under section 27.