Question

What are the normal banking functions performed by Reserve Bank of India?

Hint:

RBI’s banking functions support both government and financial stability.

Answer 1

Step 1: The Reserve Bank of India (RBI) issues and manages the currency of India, ensuring a stable money supply. Step 2: It acts as a banker to the central and state governments by managing their accounts, providing loans, and handling public debt. Step 3: It also serves as a banker to commercial banks by maintaining their cash reserves, providing credit facilities, and overseeing clearing house operations.