Why is it in the news?

• Prime Minister Narendra Modi and RBI Governor Shaktikanta Das commemorated the 90th anniversary of the RBI at a ceremony held in Mumbai.

 Snapshots from history

• The Reserve Bank of India (RBI) was established on April 1, 1935, with responsibilities including monetary stability, currency management, inflation targeting, and regulating the banking system.
• The first Governor of the RBI was Sir Osborne Arkell Smith, succeeded by Sir C D Deshmukh, the first Indian to hold the position.
• Over its 90-year history, the RBI has faced challenges such as the economic crisis of 1991, during which it transferred gold reserves to manage liquidity problems and devalued the rupee.
• Prime Ministers and Finance Ministers have sometimes clashed with RBI Governors over policy decisions, as seen in instances involving Manmohan Singh, Pranab Mukherjee, D Subbarao, Urjit Patel, and others.
• The RBI played a crucial role in steering India through the global financial crisis of 2008-09, with policies implemented by Governors like Y V Reddy, D Subbarao, and Raghuram Rajan.
• The demonetization of 2016, a decision to withdraw high-value currency notes, posed significant challenges for the RBI in managing liquidity shortages and economic disruptions.
• Under Governor Urjit Patel, the RBI introduced the Monetary Policy Committee (MPC) to decide on interest rates, initiated asset quality reviews, and utilized the Insolvency and Bankruptcy Code (IBC) to address corporate debt.
• During the COVID-19 pandemic, RBI Governor Shaktikanta Das implemented accommodative monetary policies to stimulate growth, including reducing the repo rate to 4%.
• The pandemic also accelerated digitization of payments, with initiatives like the Unified Payments Interface (UPI) revolutionizing banking transactions.
• Despite facing various challenges, the RBI has remained steadfast in defending its autonomy and fulfilling its mandate of maintaining financial stability in India.