Question

Role of RBI to control the functioning of other Bank

Answer 1

*.the RBI supervises the functioning of banks*.they see to it thet the banks maintain a cashbalance*.they see to it that the banks not only provides loans to the rich but also to the poor*.banks submit a record to the RBI on how much they lend,to whome, and at what rate of interest.

Answer 2

Hello Frnd

In every economy there is an apex bank which regulates the economy.

And this work is Done by RESERVE BANK OF INDIA in Indian economy.

Reserve Bank is the apex bank of Indian economy. It works as a banker to the Bank.

Functions of RESERVE BANK OF INDIA.

1. Issue the currency note

RBI is responsible for issuing the currency notes in India. All the currency note, except ₹ 1 currency note, are designed and printed by the RBI.

2. Lender of last resort

Bank provides us loan but have you ever though who provides loan to a Bank.

It's RBI who provides loan to the commercial bank. whenever they fails to get loan from the market. It is the policy of Govt that if the bank need loan then RBI must have to grant a loan to them. That's why it's called lender of last resort.

3.Accepts Deposit of Commercial Bank

like we deposits our money into the commercial banks and we get interest likewise RBI accepts the deposit of Commercial Bank and provides Interest to them. Each commercial bank must have to deposit certain % of their total deposit to the RBI, And it's termed as CASH RESERVE RATIO


4.RBI is the controller of credit in the Indian economy

Credit money is one of the biggest source of money flow in the economy. When the money flow increases in the market RBI has to assure that it should not exceed the prescribed limit as it can lead to inflation.

Credit is controlled by the Reserve Bank in accordance with the economic priorities of the government.



hope it helps
#jerri