RBI vs SBI
Reserve Bank of India (RBI) is the country’s national bank. It was established in 1935 under the recommendations of the Royal Commission on Indian Currency and Finance. RBI took over control of currency and credit from the government and with the introduction of the RBI Act 1934, the bank became the banker to the government. State Bank of India (SBI), on the other hand, is the largest public sector bank in the country and also the oldest. People remain confused by the differences between RBI and SBI thinking SBI to be the central bank of India. This article will erase all such misgivings by highlighting the features of the two banks.
RBI is at the centre of India’s financial system looking after monetary and financial stability. It ensures stability of interest and exchange rates thereby protecting the economy from any shocks. RBI maintains liquidity and supplies enough currency into the system so that banks like SBI can provide credit to industry as well as farmers. It ensures safety of funds of the depositors in other banks. RBI works to promote financial institutions and financial markets. It plays a crucial role in country’s economy as its decisions such as Cash Reserve ratio (CRR) and interest rates affect the lives of the population that is heavily dependent upon the banking system for their financial transactions.
State Bank of India, on the other hand is a people’s bank that has won the trust and faith of millions across the country. Whereas RBI is the banker to SBI and all other banks, SBI is the banker to the average Indian. It provides all banking facilities in accordance with the rules and regulations of the RBI and fulfills the role of a socially responsible bank by providing cheap loans to the industry and the agriculture sector, fueling the process of growth set in motion by RBI.
• RBI is the central bank of the country whereas SBI is the country’s oldest and largest bank
• RBI sets forth financial policies that SBI follows
• RBI is the banker to the government and SBI while SBI is the banker to the citizens of the country.