Question

Function of RBI
Reserve Bank India

Answer 1

Answer:

Function 1. Monopoly of Note Issue.

Like any other cen­tral bank, the RBI acts as a sole currency authority of the country. It issues notes of every denomination, except one-rupee note and coins and small coins, through the Issue Department of the Bank.

Function 2. Banker’s Bank:

As bankers’ bank, the RBI holds a part of the cash reserves of commercial banks and lends them funds for short periods. All banks are required to maintain a certain percentage (lying between 3 per cent and 15 per cent) of their total liabilities. The main objective of changing this cash reserve ratio by the RBI is to control credit.

Function 3. Controller of Credit:

The RBI controls the total supply of money and bank credit to sub serve the country’s interest. The RBI controls credit to en­sure price and exchange rate stability.

Function 4. Promotional and Developmental Functions:

Apart from these traditional function, the RBI performs various activities of promotional and developmental nature. It attempts to mobilise savings for productive purposes. This is done in various ways. For instance, RBI has helped a lot in building the huge financial infrastructure that we see now

Answer 2

Answer:

RBI is the central bank of India. RBI was established on 1 April 1935 by the RBI act 1934. Key functions of RBI are banker's bank, the custodian of foreign reserve controller of credit and to manage printing and supply of currency notes in the country.

Explanation:

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