Question

Describe the significance of the Reserve Bank of India. ( 3 marks )

Answer 1

Explanation:

Reserve bank of India (RBI) :

RBI has been playing an important role

in framing the development strategy

of Indian economy. It has a rich tradition

of data collection, generating useful

economic research, and knowledge sharing.

The reserve Bank's measures have helped

the nation to withstand many financial

crises.

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Answer 2

Answer:

Some general functions of RBI

• To support the nation's economic development in a way that is fair, balanced, and sustainable
• To ensure that the government and banks have access to banking services;
• To ensure that the financial and payments system is honest, effective, inclusive, and competitive

Explanation:

1. Monetary Authority :

• putting monetary policy into action.
• keeping an eye on the monetary policies
• preserving price stability while taking into account the nation's economic development
• Additionally, learn more about the six-member Monetary Policy Committee (MPC) by reading about it.

     2.Financial System Administrator and Regulator

• The complete parameters of banking operations are set by the RBI.

• The banking and financial system of the nation depends on these techniques to operate. methods like:
• issuing licences
• Equities' liquidity
• bank fusions
• branching out, etc.

     3.Taking care of foreign exchange

• India's FOREX Reserves are managed by RBI.
• It is in charge of preserving the rupee's value outside of the nation.
• It helps with foreign exchange payments.

    4.Money-issuing entity

• The Reserve Bank of India is in charge of offering the general population
• The complete parameters of banking operations are set by the RBI.
• The banking and financial system of the nation depends on these techniques to operate. methods for ensuring a sufficient supply of coins and cash.
• The RBI also looks after the purity of coins and cash.
• The RBI is in charge of producing money and handling coin exchanges.
• Moreover, the destruction of money and coins that are unfit for use.

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