Home >> Brief History - Chronology of Events - 1935 to 1949

Chronology of Events

The Early Years - 1935 to 1949
Date Event
1 Apr 1935 Reserve Bank of India commences operations. Sir Osborne Smith the first Governor of the Bank. The Bank was constituted as a shareholders' bank.
5 Jul 1935 Scheduled banks required to maintain the Cash Reserve Ratio, i.e., hold cash balances with the RBI equivalent to 5% of their Demand Liabilities and 2% of their Time Liabilities.
Oct 1935 London Office of the Reserve Bank set up. This was closed on September 30, 1963.
1 Nov 1936 Resignation of the first Governor, Sir Osborne Smith, wef July 1, 1937.
15 Jan 1937 Indian Companies (Amendment) Act, 1936 devotes a separate chapter exclusively to Banks.
1 July 1937 Sir James Braid Taylor assumes office as Governor.
1937 RBI acts as banker to the Government of Burma and also responsible for note issue in Burma.
Jan 1938 First Reserve Bank notes issued.
21 Jun 1938 The Failure of the Travancore National and Quilon Bank, the largest bank in the Travancore region, underlined the need for comprehensive banking reform and legislation.
3 Sep 1939 Introduction of Exchange Controls in India under Defence of India Rules.
11 Mar 1940 RBI Accounting Year changed from Jan-Dec to July-June.
1940 The silver rupee replaced by the quarternary alloy rupee. One Rupee note reintroduced. This note had the status of a rupee coin and represented the introduction of official fiat money in India.
11 Aug 1943 Sir C. D. Deshmukh assumes office of Governor.
1944 The security thread on notes introduced for the first time in India as a security feature.
1944 Laws relating to Government securities and to the management of Public Debt by the Reserve Bank of India consolidated on the basis of the Public Debt Act, 1944.
26 May 1945 Speculative activity in the financial and bullion markets. Defence of India Rules invoked to authorise the Reserve Bank to collect information from banks in respect of advances. This was to check advances against bullion for speculation.
9 Jun 1945 Reserve Bank of India entrusted with the Currency & Coinage of the British Military Administration of Burma as well as Banker to BMA.
12 Jan 1946 High Denomination Bank Notes of Rs 500, Rs 1000 and Rs 10,000 Demonetised to curb unaccounted money.
1946 Interim arrangements for Bank Supervision were put in place by ordinances which were later replaced by the Banking Companies Act, 1949. These Ordinances empowered the Reserve Bank to inspect banks, as well as authorise the licensing of bank branches.
30 Jun 1948 RBI ceased to function as the Central Bank of Pakistan. State Bank of Pakistan commenced operations wef July 1, 1949.
1 Jan 1949 Reserve Bank of India nationalised.
16 Mar 1949 Coming into force of the Banking Companies Act, 1949. This formed the statutory basis of bank supervision and regulation in India.
The Statutory Liquidity Ratio (SLR) requiring banks to maintain liquid assets was introduced for the first time. The Banking Companies Act was later renamed the Banking Regulation Act.
1 Jul 1949 Sir Benegal Rama Rau assumes office as Governor
19 Sep 1949 Rupee devalued by 30.5 % as a defensive measure consequent to the devaluation by other 'sterling area' countries.

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