"Banking system in India is almost two centuries old which during this period has undergone tremendous changes from initially being confined with the money lending at a very small level to now being spread over globally

Royal Commission on Indian currency and finance under the leadership of Hilton Young was appointed by the British Government in 1927 which recommended for setting-up of a Central Bank in India to be known as Reserve Bank. The proposal with modification was accepted in 1934 and Reserve Bank of India (RBI) came into existence in 1935 as a banker to the central government. The bank was started in 1935 as a private owned entity with the share capital of ₹ 5 crores having its head office located at Calcutta (now Kolkata) which was shifted to Bombay in the year 1937. The bank was taken over under the Reserve Bank (Transfer to Public Ownership) Act, 1948 by the Central Government by paying compensation to the private shareholders and thus the RBI under this Act become the bank of Government of India which started its statutory role on 01.01.1949 having its head office located at Bombay (now Mumbai).