Like individual consumers, businesses and organisation of all kinds, banks need their own mechanism to transfer funds and settle inter-bank transaction-such as borrowing from and lending to other banks-and customer transactions. As the banker to banks, the Reserve Bank fulfills this role.


Banks are required to maintain a portion of their demand and time liabilities as cash reserves with the Reserve Bank. For this purpose, they need to maintain current account with the Reserve Bank. The current account of the banks is opened by the Banking Departments of the Reserve Bank’s Regional offices. The Department of Government and Bank Accounts (DGBA) issues general guidelines for opening the current accounts.

Reserve Bank as Banker to Banks

Lender of Last Resort

Few initiatives

As Banker to Banks, the Reserve Bank focusses on:

  • Enabling smooth, swift and seamless clearing and settlement of inter-bank
  • Providing an efficient means of funds transfer for banks
  • Enabling banks to maintain their accounts with the Reserve Bank forstatutory reserve requirements and maintenance of transaction balances
  • Acting as a lender of last resort