Role of Rbi in the money market snd me answer of this question in one page
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Role of RBI in Money Market:
Firstly the central bank(RBI) could do this by setting a necessary reserve ratio, which would restrict the ability of the commercial banks to increase the money supply by loaning out money. ... The central bank(RBI) can influence the supply of money through special deposits.
RBI works as the monetary authority of India and there by operates the monetary policy. ... Monetary policy of the RBI deals with almost all other vital topics such as financial stability, financial markets, interest rates, credit delivery, regulatory norms, financial inclusion and institutional developments etc.
RBI's instruments to control money
This takes place when RBI purchases and sells government securities to or from the public and banks. Buying of securities infuses cash into the financial framework and promote growth, while sales of securities do the inverse and contract the economy.
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.
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