1. It is a banker to the Central Government
2. It formulates and administers monetary policy
3. It acts as an agent of the Government in respect of India’s membership of IMF
4. It handles the borrowing programme of Government
Which of these statements are correct?
Explanation
The Reserve Bank of India established in 1935 is a central bank carries out several functions such as:
The RBI acts as the banker to the central government, managing its banking transactions, including the receipt and payment of money, and facilitating the government’s borrowing program. It also manages the government’s public debt and issues government securities. The RBI is responsible for formulating, implementing, and monitoring India’s monetary policy. The aim is to maintain price stability while considering the objective of economic growth. The RBI represents the Government of India in dealings with the International Monetary Fund (IMF) and manages transactions and communications between the IMF and the country. The RBI manages the government’s borrowing program which includes the issuance and redemption of government securities, to raise funds for various public expenditures.