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Removed empty portal template using script

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	==References==		==References==
	~~{{Portal\|Banks\|Money}}~~
	{{reflist}}		{{reflist}}

2409:4054:2197:95F2:0:0:1013:8A4 at 05:10, 13 August 2021

2021-08-13T05:10:53Z

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{{Use dmy dates|date=October 2015}}
{{Use Indian English|date=April 2018}}
{{Infobox legislation
| short_title = Reserve Bank of India Act, 1986
| legislature =
| image = Star-of-India-gold-centre.svg
| imagesize = 200
| imagelink =
| imagealt =
| caption =
| long_title = An Act to constitute a Reserve Bank of India
| citation = [https://www.indiacode.nic.in/bitstream/123456789/2398/1/A1934_02.pdf Act No. 2 of 1934]
| territorial_extent = Whole of [[India]]
| enacted_by = [[Imperial Legislative Council]]
| date_enacted = 6 March 1934
| date_assented =
| date_signed =
| date_commenced = 1 April 1935
| bill =
| bill_citation =
| bill_date =
| introduced_by =
| 1st_reading =
| 2nd_reading =
| 3rd_reading =
| white_paper =
| committee_report =
| amendments =
| repeals =
| related =
| summary =
| keywords =
| status = in force
}}
'''Reserve Bank of India Act, 1934''' is the legislative act under which the [[Reserve Bank of India]] was formed. This act along with the [[Companies Act]], which was amended in 1936, were meant to provide a framework for the supervision of banking firms in [[India]].<ref name="Pathak2007">{{cite book|author=Pathak|title=Legal Aspects Of Business|url=https://books.google.com/books?id=bPaT-RJf-00C&pg=PA460|access-date=13 January 2015|date=1 May 2007|publisher=Tata McGraw-Hill Education|isbn=978-0-07-065613-0|page=460}}</ref>

==Summary==
The Act contains the definition of the so-called scheduled banks, as they are mentioned in the 2nd Schedule of the Act. These are banks which were to have paid up capital and reserves above 5 lakh.<ref name="Iyengar2009">{{cite book|author=Vijayaragavan Iyengar|title=Introduction to Banking|url=https://books.google.com/books?id=eWLuY_ABdZkC&pg=PA155|access-date=13 January 2015|date=1 January 2009|publisher=Excel Books India|isbn=978-81-7446-569-6|pages=155–}}</ref>

There are various section in the RBI Act but the most controversial and confusing section is Section 7. Although this section has been used only once by the central govt,<ref>https://www.indiatoday.in/education-today/gk-current-affairs/story/central-government-invoke-section-7-act-1934-history-and-amendment-1380387-2018-11-01</ref> it puts a restriction on the autonomy of the RBI. Section 7 states that central government can legislate the functioning of the RBI through the RBI board, and the RBI is not an autonomous body.

Section 17 of the Act defines the manner in which the RBI (the central bank of India) can conduct business. The RBI can accept deposits from the central and state governments without interest. It can purchase and [[Discounting|discount]] [[bills of exchange]] from commercial banks. It can purchase [[Foreign exchange reserves|foreign exchange]] from banks and sell it to them. It can provide loans to banks and state financial corporations. It can provide advances to the central government and state governments. It can buy or sell [[government securities]]. It can deal in [[Derivative (finance)|derivative]], [[repo]] and reverse repo.<ref name="Iyengar2009"/>

Section 18 deals with emergency loans to banks. Section 21 states that the RBI must conduct banking affairs for the central government and manage [[public debt]]. Section 22 states that only the RBI has the exclusive rights to issue currency notes in India. Section 24 states that the maximum denomination a note can be is {{INRConvert|10000}}.

Section 26 of Act describes the [[legal tender]] character of Indian bank notes.

Section 28 allows the RBI to form rules regarding the exchange of damaged and imperfect notes.<ref name="Iyengar2009"/>

Section 31 states that in India, only the RBI or the central government can issue and accept [[promissory note]]s that are payable on demand. However, [[cheque|cheques]], that are payable on demand, can be issued by anyone.<ref name="Iyengar2009"/>

Section 42(1) says that every scheduled bank must have an average daily balance with the RBI. The amount of the deposit shall be more that a [[Statutory liquidity ratio|certain percentage]] of its net time and demand liabilities in India.<ref name="Iyengar2009"/>

==References==
{{Portal|Banks|Money}}
{{reflist}}

{{Reserve Bank of India}}
[[Category:Reserve Bank of India]]
[[Category:Acts of the Parliament of India 1934]]
[[Category:Banking in India]]
[[Category:Financial history of India]]

Reserve Bank of India Act, 1934 - Revision history

CleanupBot II: Removed empty portal template using script

2409:4054:2197:95F2:0:0:1013:8A4 at 05:10, 13 August 2021