Today, when the Reserve Bank of India is considered the heartbeat of the country’s economy, very few people know that its first Governor was an Australian banker. His name was Sir Osborne Arkell Smith. He assumed this responsibility at a time when the banking system in India was stepping on a new path.
Sir Smith was born on 26 December 1876 in Australia. He remained associated with the banking profession from the very beginning. He worked in the Bank of New South Wales for about 20 years. After this, served in Commonwealth Bank of Australia for 10 years. His understanding, discipline and clear thinking in the field of banking gave him a distinct identity.
When did you come to India?
He came to India in the year 1926. Here he was made the Managing Governor of Imperial Bank of India. At that time Imperial Bank was considered the largest banking institution in the country. India’s economic conditions, trade needs and banking challenges were different, but Smith quickly understood this environment. Under his leadership, the working style of the Imperial Bank improved and the banking system got new strength.
His work was appreciated not only in India but also during the British rule. In March 1929, he was given the title of ‘Knight’. On 27 February 1930, the then Governor General Lord Irwin formally gave him this honor at the Viceroy’s House, New Delhi. Later, he also received big honors like KCIE and then KCSI. These honors were considered very prestigious at that time.
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When was RBI started?
Meanwhile, the need for a new central bank was being felt in India. Preparations were underway for the establishment of the Reserve Bank of India. When the RBI came into existence on 1 April 1935, Sir Osborne Smith was appointed as its first Governor. This responsibility was not easy. There were different provinces, different economic conditions and many challenges in the country. Establishing a new central bank was a big deal in itself.
When did you resign?
Smith took many important decisions based on his experience. He had clear views on issues like interest rates and exchange rates. He believed that some policies were necessary to strengthen the banking system. However, his thinking on these issues was different from that of the government of that time. These differences later became the reason for his leaving the post. He left his post on 30 June 1937, that is, he resigned before the completion of his term. But even in such a short time he strengthened the foundation of RBI.
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