Question

The Reserve Bank was constituted under which Section of RBI Act

• A. Section 4
• B. Section 7
• C. Section 12
• D. Section 3

Answer 1

Answer:

D. Section 3

• In 1931, the Central Banking Enquiry Committee also recommended to start a Central Bank.
• As per this, a bill was introduced in Legislative Assembly called the Reserve Bank of India Bill in September 8, 1933.
• The Assembly Passed the RBI Act in 6th March, 1934 (Act II of 1934)
• RBI came into force (commenced its business) on 1st April, 1935 by taking over the central banking function of Imperial bank of India
• The Reserve Bank was constituted under Section 3 of RBI Act.
• The Central Govt. holds the whole capital of RBI.
• First headquarters is at Kolkata (1935-37)
• In 1937 headquarters moved to Mumbai 
• RBI was formed as a shareholder's bank with an initial capital of 5 crore divided into 5 Lakh shares of Rs.100 each.
• This 5 lakh shares was jointly subscribed by Central Government and Private Shareholders.