Evolution of Central Banking in India

I must congratulate the organizers for choosing this important topic for deliberation in this seminar. I have great pleasure in mentioning that the theme of the Report on Currency and Finance 2004-05, prepared by the staff of the Reserve Bank of India (RBI), is also that of evolution of Central Banking in India (RBI, 2005a). In going through the process of compilation of the Report, I have found the evolutionary process of central banking all over the world and also that in India to be very interesting and informative. The most striking feature of central bank functioning both across time and over countries in a contemporaneous manner, is not how similar their functions are or have been, but how heterogeneous they are and how their functions have constantly evolved over the changing times. My interest in tracking the evolution of central banking in India has also been triggered by the recent publication of the history of the Reserve Bank of India in three volumes, covering the period 1935 1981 (RBI, 2005b).