Discuss in detail salient features of Reserve Bank of India, Act, 1934.

The Reserve Bank of India Act, 1934 is the legislative framework that governs the functioning and operations of the Reserve Bank of India (RBI), India's central banking institution. This act was enacted to provide for the establishment of the Reserve Bank of India and to define its powers and functions. Here are some of its salient features:

1. Establishment of the Reserve Bank of India (RBI): The act established the RBI as the central banking authority of India. It delineates the structure, powers, and functions of the RBI, positioning it as the primary regulator and supervisor of the Indian banking and financial system.

2. Constitution of the Central Board of Directors: The act outlines the composition of the Central Board of Directors of the RBI, which includes a Governor, Deputy Governors, and other directors appointed by the Government of India. The Central Board is responsible for formulating policies and overseeing the operations of the RBI.

3. Monetary Policy Mandate: The act empowers the RBI to formulate and implement monetary policy in India. This includes regulating the supply of currency and credit, managing interest rates, and maintaining price stability to support economic growth and financial stability.

4. Currency Issuance and Regulation: The act vests the RBI with the sole authority to issue currency notes in India. It also grants the RBI the power to regulate the circulation and exchange of currency, including the maintenance of reserves and the withdrawal of old or damaged currency notes.

5. Banking Regulation and Supervision: The RBI Act provides the RBI with extensive powers to regulate and supervise banks and financial institutions operating in India. This includes licensing and supervision of banks, setting prudential norms, conducting inspections, and resolving banking crises.

6. Foreign Exchange Management: The act empowers the RBI to regulate foreign exchange transactions and manage India's foreign exchange reserves. The RBI plays a crucial role in maintaining the stability of the Indian rupee in the foreign exchange market and managing external trade and payments.

7. Government Banking and Debt Management: The RBI Act outlines the relationship between the RBI and the Government of India regarding banking services, debt management, and fiscal operations. The RBI acts as the banker to the government, facilitating government transactions, managing public debt, and advising on fiscal policy.

8. Supervision of Payment Systems: The act grants the RBI authority over payment systems, including the regulation and oversight of payment and settlement systems to ensure efficiency, reliability, and security in the payment ecosystem.

9. Financial Stability and Development: The act mandates the RBI to promote the stability and development of the financial system in India. This includes monitoring systemic risks, implementing macroprudential policies, and fostering financial inclusion and innovation.

Overall, the Reserve Bank of India Act, 1934 serves as the cornerstone of India's monetary and financial system, providing the legal framework for the functioning of the RBI and its pivotal role in promoting economic stability, growth, and development.