Reserve Bank of India and RBI has an important role to play in regulating & managing this segment. RBI manages forex and gold reserves of the nation. On a given day, the foreign exchange rate reflects the demand for and supply of foreign exchange arising from trade and capital transactions. The RBI's Financial Markets Department (FMD) participates in the foreign exchange market by undertaking sales / purchases of foreign currency to ease volatility in periods of excess demand for/supply of foreign currency. Reserve bank of India is the sole body who is authorized to issue currency in India. The bank also destroys the same
Reserve Bank of India its nationalization in 1949. RBI has monopoly of note issue. In the 1950s, the Indian government, under its first Prime Minister Jawaharlal Nehru, developed a centrally planned economic policy that focused on the agricultural sector. The administration nationalized commercial banks and established, based on the "Banking Companies Act, 1949" (later called the Banking Regulation Act), a central bank regulation as part of the RBI. Furthermore, the central bank was ordered to support economic plan with loans. As a result of bank crashes, the RBI was requested to establish and monitor a deposit insurance system. Meant to restore the trust in