The correct answer is D. All of the above.
The Reserve Bank of India (RBI) is the central bank of India. It was established on April 1, 1935, in accordance with the Reserve Bank of India Act, 1934. The RBI is responsible for formulating and implementing monetary policy, regulating the financial system, and providing banking services to the government and the public.
The RBI controls the commercial banks through a variety of means, including:
- Periodic inspection of banks: The RBI conducts regular inspections of commercial banks to ensure that they are complying with all applicable laws and regulations.
- Follow-up action: The RBI takes follow-up action on any issues that are identified during inspections, such as issuing directions to banks to correct deficiencies or imposing penalties.
- Calling for returns and other information: The RBI can call for returns and other information from commercial banks on a regular or ad hoc basis. This information is used by the RBI to monitor the performance of banks and to identify any potential risks.
- Other means: The RBI also has the power to issue directions to commercial banks, to approve or reject mergers and acquisitions, and to appoint or remove directors of banks.
The RBI’s control over commercial banks is essential to ensure the stability of the financial system and to protect the interests of depositors. The RBI’s powers are wide-ranging and it has the ability to take swift action to address any problems that arise in the banking sector.