Q27. Explain the functions of RBI ?
Answers
Answer:
Explanation:
FUNCTIONS OF RBI
Monetary Authority: The main function of RBI is formulating implementing the monetary policies of India. Creating and balance between “Price stability” and “future economic growth” is the main challenge of RBI as a monetary authority. Read more on monetary authority role of RBI
Regulator and supervisor of the financial system: RBI sets the rules and regulations under which Indian banks and financial system must operate. The idea is to run the banks and financial system so efficiently that public trust on the system is maintained. When people feel confident about the financial system, it’s a win for RBI. How RBI ensures public confidence? By ensuring that the depositors money is safe with the banks, and all banking & financial functions are operating seamlessly as per rules. Read more on how RBI manages financial system.
Manager of Foreign Exchange: In India, all foreign currency flow must be done as per FEMA (Foreign Exchange Management Act). It is the RBI who ensures that transactions happens as per FEMA. The bigger role of RBI is in ensuring that external trade happens in a seamless manner. Whether, the trader is a resident Indian or a foreign national, they must be able to deal in foreign exchange in an easy and transparent manner. Read more about Foreign Exchange Management by RBI.
Issuer of Currency: It is in the responsibility of the RBI to print and issue new currency notes in India. It is also the RBI’s responsibility to exchange old or damaged notes for new ones. This way RBI can manage the availability of enough “good quality cash” needed in the market at a given point in time. Here, “cash” means both notes and coins. Read more about RBI’s role as issuer of currency.
Regulator and Supervisor of Payment and Settlement Systems:In India, all payments must be settles as per PSS Act, 2007 (Payment and Settlement Systems Act). It is the RBI who ensures that transactions happens as per PSS. In India there are several payments systems like ECS, Credit Card, Debit Card, RTGS, NEFT, IMPS and UPI. All these payments system are covered by PSS Act, 2007. The overall objective of RBI is to provide fast, safe and efficient payment system for the public. Efficient payment flows is one of the main confidence booster of the public in the Indian financial system. Read more here.
Banker to Government: Like retail and commercial banks gives service to common public, RBI is the retail bank for the Government of India (GOI). RBI also acts as a merchant banker for the GOI. Read more about role of RBI as Banker to GOI.
Banker to Banks: All Banks in India maintains an account with the RBI. They keep their statutory reserves and other deposits in this account. Hence, this way RBI also functions as banker to the banks. It is RBI’s responsibility to ensure inter-bank transactions. RBI can also lend money to banks as a special case. Read more about role of RBI as Banker to Banks.
Answer:
the important function of Rbi are. 1. overseeing monetarypolicy.2. Issuing currency. 3.Managing foreign currency. 4.Bank of government.5.Banker of scheduled commercial banks. 6.works for overall economic. growth of the country
Explanation:
Through monetary policy government controls the supply of currency in India. 2.The Reserve Bank of India has the right issue notes except one ripped not assigned .3.