Royal Monetary Authority was established in 1982 with the enactment of the RMA Act 1982 on 4th August by the 56th session of the National Assembly. The RMA commenced operations from 1st April 1983 by taking over the issue of the national currency, the management of the external reserves and foreign exchange operations. In 1988, the Authority assumed the role of Government banker, holding bulk of government deposits and providing finance through ways and means advance to the Government. With the passage of the Financial Institution Act of Bhutan 1992, the RMA Act (1982) was amended to include licensure, regulation and supervision of financial institutions of Bhutan.

After Bhutan made the transition to a Democratic Constitutional Monarchy in 2008, the RMA Act 2010 passed by the Parliament in June 2010 replaced the RMA Act (1982). With the enactment of the RMA Act (2010), the status of the RMA has been elevated to that of an autonomous Central Bank with greater powers in terms of its mode of functioning and decision making process.