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History of any institution aims at documenting, collating, compiling and presenting
a comprehensive, authentic and objective study of the working of that institution,
the events, the policies, the institutional development of the organisation. The
institutional history of the central bank reflects, in some ways, the monetary history
of the country, bringing down to concrete and human terms the policies, the considerations,
the mistakes, the thought processes, the decision making and the broader canvas
of political economy of the times.
The history of Reserve Bank of India thus not only traces the evolution of the
central banking in India but also serves as a work of reference and an important
contribution to the literature on monetary, central banking and development history
of India. We have so far published four volumes of our history.
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The Reserve Bank of India was set up on April 1, 1935. It is one of the few central
banks to document its institutional history. So far, it has brought out four volumes
of its history. Volume 1, covering the period from 1935 to 1951, was published in
1970. It details the initiatives taken to put in place a central bank for India
and covers the formative years of the Reserve Bank. It highlights the challenges
faced by the Reserve Bank and the Government during World War II and the post-independence
era.
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Volume 2, covering the period from 1951 to 1967 was published in 1998. This period
heralded an era of planned economic development in India. This volume captures the
initiatives taken to strengthen, modify and develop the economic and financial structure
of the country. Apart from the Reserve Bank’s role as the monetary authority, it
highlights the endeavour to establish an institutional infrastructure for agricultural
and long-term industrial credit in India. This volume succinctly covers the external
payment problems faced by the country and the rupee devaluation of 1966.
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On March 18, 2006, Hon’ble Prime Minister, Dr. Manmohan Singh released the third
volume of the Reserve Bank’s history covering the period from 1967 to 1981. An important
event of this period was nationalisation of fourteen banks in 1969, leading to spread
of banking in country’s hinterland. The issues of safety and prudence in banking
also gained prominence. Internationally, the abandonment of the Bretton Woods system
in 1971 posed serious challenges for the developing countries including India. The
volume also deals with the matters of co-ordination between the Reserve Bank and
the Government.
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Volume 4 of the Reserve Bank’s history was also released by Dr. Manmohan Singh,
Hon’ble Prime Minister of India on August 17, 2013. It covers the eventful 16 years
from 1981 to 1997 and is published in two parts, Part A and Part B, which ideally
should be read in continuum. Part A focusses on the transformation of the Indian
economy from a regime of restrictions to progressive liberalisation. The 1980s were
characterised by an expansionary fiscal policy accompanied by automatic monetisation
of budgetary deficit that strained the conduct of monetary policy. Similarly, a
highly regulated banking system impaired efficiency. The domestic macroeconomic
imbalances combined with deteriorating external conditions triggered the balance
of payments (BoP) crisis of 1991. Subsequent reforms ushered in far reaching changes
not only in the economy but also in central banking. Part B of the volume captures
the implementation of structural and financial sector reforms: fiscal correction
and phasing out of automatic monetisation; development of government securities
market; and greater integration among money, securities and foreign exchange markets.
It also covers the transformation in banking with liberalisation and improvement
in credit delivery. At the same time, the Reserve Bank had to contend with a securities
scam which led to the introduction of better control systems and strengthening of
the payment and settlement systems.
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The fifth volume of the Reserve Bank of India’s history was released in December 2022. This volume encompasses the 11-year period from 1997 to 2008. The volume, published by the Cambridge University Press, contains the institutional history of the Reserve Bank documented on the basis of official records, publications and oral discussions with persons who were closely associated with the working of the Reserve Bank during the period. This volume covers the developments in policies and operations in major functional areas during the period which was marked by two major crises in the global economy, i.e., the Asian financial crisis and the global financial crisis.
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