No journey is easy for an institution it has its highs and lows. But usually, the most challenging part is the inception. It has been the case for the Reserve Bank of India as well.
On RBI’s Foundation Day, Free Press Journal’s looks through Reserve Bank of India’s (RBI) archives, to know some facts of RBI’s history and its governors.
- According to RBI History (Volume I), the efforts to set up in India a banking institution, with some elements of a central bank can be traced to 1773. So, it was after 160 years that the bank was formally inaugurated. Though the introduction of legislation to set up the RBI was first introduced in January 1927 and seven years later, in March 1934, that the enactment became an accomplished fact.
- The first governor of RBI was an Australian national, Sir Osborne Smith, who was appointed on April 1, 1935. He was a professional banker, who served for over 20 years with the Bank of New South Wales and 10 years with the Commonwealth Bank of Australia before coming to India in 1926 as a Managing Governor of the Imperial Bank of India.
- The Central Office of the bank was initially established in Kolkata but was permanently moved to Mumbai in 1937. The first meeting Central Board of the Committee was held on April 10, 1935 in Calcutta.
- Sir Osborne Smith was also the first RBI governor who resigned before completion of his tenure (in 1937 her quit).
- The Bank made its first issue of currency notes in January 1938 in denominations of Rs 5 and Rs 10. Later that year, the central bank issued notes of the denominations of Rs 100, Rs 1,000 and Rs 10,000.
- On the demise of James Taylor (successor of Smith), Chintaman Dwarkanath Deshmukh was appointed Governor in 1943. Taylor was the only serving governor who died during his tenure as RBI governor.
- But it was only in August 1943, that an Indian became the Governor of the Bank for the first time -- Chintaman Dwarkanath Deshmukh. He was a member of the Indian Civil Service, who had served as Secretary and in 1941 as Deputy Governor of the Bank.
- During his tenure as Governor, he represented India at the Bretton Woods negotiations in 1944. He saw the transition to Independence and the partition of the country and the division of the assets and liabilities of the Reserve Bank between India and Pakistan.
- In 1949, the bank was nationalised. All shares in the capital of the Bank were deemed transferred to the Central Government on payment of suitable compensation. Deshmukh helped the smooth transition of the Bank from a shareholder's institution to a state-owned organisation, when the Bank was nationalised on 1st January 1949. While he was appointed during the British Raj, he continued to serve even after the partition. He later became the Finance Minister (FM) between 1950-56.
- After Deshmukh, it was only former Prime Minister (PM) Manmohan Singh, who served as the Finance Minister, which was much later. But Singh continues to be the only governor who held the office of PM. Singh served as a governor from 1982 to 1985.
- Meanwhile, RBI also had a governor for 15 days and that was A Ghosh. He was the Deputy Governor of the Bank since 1982. He was appointed Governor for a brief period of 15 days till the next RBI governor could take over. He served from January 15, 1985, to February 2, 1985.
- Then there were S Venkitaramanan (1990-1992) and Dr Urjit Patel (2016-2018), who served as a governor for around two years.
- In total, there have been 25 governors in the 86-year-old journey of the Central Bank. At present, Shaktikanta Das is serving as the 25th RBI governor.
- Every governor has witnessed their own set of challenges like a conflict with the government at the centre, inflation, a market-driven crisis, etc. But the institution has continued to survive.
- On this 86th Foundation Day, the Central bank posted a tweet with resonates the challenges such large institution hold. I would like to quote that tough times never last, tough people and tough institutions do.