Introduction and Historical Background

- The Prime Minister recently marked the commemoration of 90 years of the Reserve Bank of India (RBI) with his address at the opening ceremony of the RBI@90 event held in Mumbai.

- The RBI was instituted based on the recommendations of the Royal Commission on Indian Currency, 1926, more commonly known as the Hilton Young Commission. The establishment of RBI was further reiterated by the Indian Central Banking Enquiry Committee in 1931.

- The RBI was established in 1935 under the Reserve Bank of India Act, 1934. Sir Osborne Smith had the honour of being the first Governor of RBI.

- In a significant turn of events, the RBI was nationalised in 1949, transforming its institutional history.

Evolution and Advances over the Years

- The RBI has evolved and expanded significantly over the past nine decades, adapting itself to the changes in the country's economic and financial landscape.

- The bank has successfully positioned itself as an inflation-targeting central bank, prioritising price stability and sustainable growth.

- It has also accumulated a formidable reserve of foreign exchange reserves to safeguard the nation's economy against external financial shocks.

- Striving for macroeconomic stability has been another cornerstone of RBI's operations.

- A marked reduction in Non-Performing Assets (NPAs) and the incorporation of technology in payment systems are notable outcomes of the RBI's strategic actions.

- The RBI has also ventured into launching its central bank digital currency, reflecting its progressive approach.

Current Challenges and Future Roadmap

- Despite its remarkable strides, the RBI is confronted with a number of challenges.

- These include strengthening the banking regulation and supervision mechanisms, enhancing transparency with regulated entities, and keeping pace with regulating new-age fintech firms.

- The RBI also has limited powers over Public Sector Banks, a challenge that merits attention.

- Additionally, the growing potential for fiscal dominance of monetary policy is another issue that RBI needs to address.

In conclusion, as the RBI celebrates this milestone, it stands as a robust institution, continuously evolving with the times, and playing a crucial role in the stability and development of India's economy. Gearing up for future challenges and opportunities, the central bank continues to commit itself to excellence and progress.