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.