RAS question
Reserve Bank of India was established based on the recommendation of:
Correct answer: (A) Hilton Young Commission.
The Reserve Bank of India was established on the recommendation of the Hilton Young Commission.
Explanation
The Hilton Young Commission is the relevant recommendation because the RBI's own history states that the Reserve Bank of India was set up on the basis of its recommendations. The official account also links this to the Reserve Bank of India Act, 1934, which gave the Bank its statutory basis, and records that the Bank commenced operations on April 1, 1935. In exam terms, this connects the institutional origin of India's central bank to the Royal Commission on Indian Currency and Finance, better known as the Hilton Young Commission, rather than to commissions dealing with constitutional reforms or earlier currency questions.
Why the other options are wrong
- (B) The Simon Commission dealt with constitutional reforms, not the recommendation to establish India's central bank.
- (C) The Chamberlain Commission was an earlier commission on Indian currency, but the RBI's establishment is tied to the Hilton Young Commission.
- (D) The Fowler Committee was a different committee and is not the body cited for recommending the Reserve Bank of India.
Concept
This tests the Indian Economy syllabus area on monetary institutions and the historical origin of RBI. It recurs in RAS because central banking, currency management and statutory financial institutions are core factual anchors for economy questions.