Question

Which is NOT a function of the Reserve Bank of India?

• A. Lending to businesses
• B. Bank of issues
• C. Banker of the government
• D. Controller of credit

Hint:

The RBI regulates the banking system and controls credit but does not lend directly to businesses.

Answer 1

The Correct Option is A

Step 1: Understand the functions of the RBI.
The Reserve Bank of India (RBI) is India's central bank and performs several key functions:
- It is the Bank of issues, meaning it has the authority to issue currency notes.
- It acts as the banker to the government, providing banking services to the central and state governments.
- It controls credit in the economy by regulating the monetary policy, ensuring liquidity, and managing inflation.
Step 2: Identify the incorrect function.
Lending to businesses is not a direct function of the RBI. While the RBI regulates commercial banks, it does not directly lend to businesses; instead, it controls the monetary policy that influences commercial lending.
Final Answer: \[ \boxed{\text{Lending to businesses}} \]