Objectives of the Reserve Bank of India

The Preamble to the RBI Act, 1934 itself states the RBI's core purpose: "to regulate the issue of Bank notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage." From this flow several specific objectives:

• To maintain monetary stability — keeping the internal value of the rupee (i.e. its purchasing power, or price stability) reasonably steady, so that inflation does not erode people's savings and incomes.
• To maintain the external value of the rupee — managing the exchange rate and the country's foreign exchange reserves so that India's currency remains stable in relation to other currencies.
• To manage the currency and credit system — being the sole authority to issue currency notes and to regulate the volume and direction of credit that banks create.
• To promote economic growth and development — ensuring that adequate credit flows to productive and priority sectors of the economy (agriculture, small industry, exports) at reasonable cost. …