The correct answer is D. The RBI is a banker to both Central and State Government.
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 the banker to the Government of India and the banker’s bank. It is also the issuer of the Indian rupee.
The RBI has the following functions:
- To regulate the issue of bank notes and keeping of reserves with a view to securing monetary stability in the country;
- To operate the currency and credit system of the country to the best advantage of the country;
- To foster the development of the financial system in the country;
- To act as the banker to the Government of India;
- To act as the banker’s bank;
- To regulate the foreign exchange market in the country;
- To promote the growth of the economy of the country.
The RBI is governed by a central board of directors, which is appointed by the Government of India. The central board of directors is headed by the Governor of the RBI, who is appointed by the President of India.
The RBI has its headquarters in Mumbai, and it has branches all over the country. The RBI also has offices in a few foreign countries.
The RBI is a very important institution in the Indian economy. It plays a vital role in the regulation of the financial system and the promotion of economic growth.
The other options are not correct.
Option A is not correct because currency notes
issued by RBI are legal tender only in India.Option B is not correct because all commercial banks, including those owned by the government, need a licence from the RBI to do banking business.
Option C is not correct because the treasury bills are sold by the Government of India for raising its short-term funds.