Which one of the following is not the function of the Reserve Bank of lndia?

by

Issue of bank notes
Custodian of cash reserves of commercial banks
Accepting deposits and advancing loans to public
Controller of credit

The correct answer is C. Accepting deposits and advancing loans to public.

The Reserve Bank of India (RBI) is the central bank of India. It was established on 1 April 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 currency in India.

The RBI has the following functions:

act as the banker’s bank
  • To regulate the issue of bank notes
  • To maintain the external value of the rupee
  • To promote the development of the financial system
  • To act as the lender of last resort
  • To regulate the activities of commercial banks
  • To collect and publish statistical data on the Indian economy

    • The RBI does not accept deposits from the public or advance loans to the public. This is because the RBI is a central bank and its primary function is to regulate the monetary system. Accepting deposits from the public and advancing loans to the public would be in conflict with this objective.

    The RBI does, however, provide certain services to the public, such as issuing bank notes, maintaining the external value of the rupee, and regulating the activities of commercial banks.

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