The Reserve Bank of India was nationalised with effect from 1st January, __________.

Correct option is B

The correct answer is (b) 1949.

Explanation:

• The Reserve Bank of India (RBI), which was established in 1935, was nationalized on 1st January 1949.
• Prior to this date, the RBI was a privately-owned institution, with shareholders, but after nationalization, it became fully owned by the Government of India.
• The nationalization of the RBI was an important step toward giving the government control over monetary policy, ensuring a more unified approach to managing the Indian economy.
• The RBI is now responsible for regulating the monetary system, managing inflation, controlling the money supply, and acting as the central bank of India.

Information Booster:

• Purpose of Nationalization: The nationalization of the RBI was a part of the broader economic reforms undertaken by the Government of India after independence. It aimed at ensuring the central bank was not influenced by private interests and that it would serve the public and national interests.

Role of the RBI Today:

1. Monetary Policy: The RBI plays a central role in shaping India's monetary policy, including controlling inflation and stabilizing the currency.
2. Currency Issuance: It has the exclusive authority to issue Indian Rupees.
3. Financial Stability: The RBI supervises and regulates Indian banks and financial institutions to ensure the stability and health of the country's financial system.
4. Lender of Last Resort: It acts as the lender of last resort in times of financial distress.

Pre-Nationalization:

• Before it was nationalized, the RBI had been privately owned by a group of shareholders, and its decisions were influenced by private sector interests. The nationalization was seen as an effort to align the central bank’s objectives with national goals, especially after India gained independence in 1947.

Post-Nationalization Growth:

• After its nationalization, the RBI helped facilitate India's economic development through initiatives like: Expanding access to banking in rural areas. Supporting economic planning and development through credit distribution. Managing foreign exchange reserves and stabilizing the currency.