Explain the functions of Reserve Bank of India Largest Online Education Community

RBI has the legal right to print all currency notes except one rupee note and subsidiary coins. The Finance Ministry is authorised to issue one rupee note and subsidiary coins. A proportional value of gold and foreign exchange is kept as reserve for issuing notes. This newly constituted dept. will separate the activities of debt management and monetary operations in the future. This department will also perform the duties of developing and monitoring the instruments of the money market and also monitoring the government securities and foreign money markets.

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What are the Main Functions of RBI?

Reserve Bank of India was established in 1935 and since then it has regulated the flow of Indian rupee in the country. The Reserve Bank is also responsible for managing other commercial banks through its various policies and directions. The Reserve Bank regulates the amount of money in circulation by loaning money to the banking sector and influencing the total demand for money from the private and public sectors. The RBI serves bankers to the government for both the federal and state governments.

• RBI also aims to promote industrial and agricultural developments.
• The central bank of India, RBI is also regarded as a bank of banks owing to the functions of RBI.
• The RBI is in charge of the Indian government’s monetary and banking policy.
• RBI also advises the Government during some circumstances like not to go for over expenditure during inflation.

The Reserve Bank of India is a government-owned corporation. It is responsible for printing currency notes and regulating India’s economic money supply. RBI controls the credit created by the commercial banks in India, in accordance with the economic priorities of the government of India. RBI uses quantitative and qualitative methods to control and regulate the flow of money in the market.

Functions and Roles of Reserve Bank of India

It acts as a last resort to all books in their financial matters. The commercial banks approach the Reserve Bank in times of emergency to tide over financial difficulties, and the Reserve bank comes to their rescue though it might charge a higher rate of interest. Often regarded as the banker of banks, the RBI acts as a parent to all commercial banks in India. Thus, it becomes the lender of the last resort for all banks when they are in a crisis situation.

Now, let us look at some of the important functions of RBI. As of October 2021, the Governor of the Reserve Bank of India is Mr Shaktikanta Das. He is the 25th RBI Governor and all the RBI functions are supervised by him. In this article, you will learn about how the government generates productive jobs and brings benefits across society and Economic transformation.

Report on India’s Banking Trends & Progress

It conducts all government banking activities, including the receipt or payment of money. As per RBI, priority sectors are those sectors of the economy that may not get timely and sufficient credit in the absence of these special schemes. So now, the RBI is responsible to oversee the foreign exchange market in India.

The commercial banks hold deposits in the Reserve Bank and the latter has the custody of the cash reserves of the commercial banks. As banker to the government the Reserve Bank manages the banking needs of the government. It has to-maintain and operate the government’s deposit accounts.

Role and Functions of RBI: Prohibited Functions, PPT Available

Banker to the Government–The second important function of the Reserve Bank is to act as the Banker, Agent and Adviser to the Government of India and states. It performs all the banking functions of the State and Central Government and it also tenders useful functions of rbi class 10 advice to the government on matters related to economic and monetary policy. Reserve Bank of India (RBI) is the central bank of the country. It is responsible for the printing of currency notes and managing the supply of money in the Indian economy.

RBI is the responsible agency for receiving and paying money on behalf of the various government departments. The Reserve Bank of India annually publishes its annual report, a statutory report. The Indian economy is valued or progressed in this research. An analysis of the economy, the Reserve Bank’s operations in that year, and also the RBI’s anticipated vision or plan for the coming year, as well as the Reserve Bank’s accounting records.

As the RBI meets the need of funds of commercial banks, the RBI func­tions as the Tender of the last resort’. Like any other cen­tral bank, the RBI acts as a sole currency authority of the country. The main aim of this policy is to ensure growth while keeping price stability in check.

• After independence, Government of India nationalized it and made it as the central bank.
• The RBI periodically in­spects banks and asks them for returns and neces­sary information.
• RBI jointly with the central government of India provides ease in foreign trade so that it attracts more FDI (Foreign Direct Investment).
• The RBI acts as the banker to the government of India and State Governments (except Jammu and Kashmir).