I Like It... Essay

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What are the functions of Reserve Bank of India? The Reserve Bank of India performs various traditional central banking functions as well as undertakes different promotional and developmental measures to meet the dynamic requirements of the country. The broad objectives of the Reserve Bank are: (a) Regulating the issue of currency in India; (b) keeping the foreign exchange reserves of the country; (c) establishing the monetary stability in the country; and (d) developing the financial structure of the country on sound lines consistent with the national socio-economic objectives and policies. Main functions of the Reserve Bank are described below: 1. Note Issue: The Reserve Bank has the monopoly of note issue in the country. It has the sole right to issue currency notes of all denominations except one-rupee notes. One-rupee notes are issued by the Ministry of Finance of the Government of India. The Reserve Bank acts as the only source of legal tender because even the one-rupee notes are circulated through it. The Reserve Bank has a separate Issue Department, which is entrusted with the job of issuing currency notes. The Reserve Bank has adopted minimum reserve system of note issue. Since 1957, it maintains gold and foreign exchange reserves of Rs. 200 crore, of which at least Rs. 115 crore should be in gold. 2. Banker to Government: The Reserve Bank acts as the banker, agent and adviser to Government of India: (a) It maintains and operates government deposits, (b) It collects and makes payments on behalf of the government, (c) It helps the government to float new loans and manages the public debt, (d) It sells for the Central Government treasury bills of 91 days duration, (e) It makes 'Ways and Means' advances to the Central and State Governments for periods not exceeding three months, (f) It provides development finance to the government for carrying

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