State the role of Reserve Bank of India.
The role of Reserve bank of India can be described by the following points:
- It holds the top spot in India’s banking hierarchy .
- It is in charge of issuing currency notes on behalf of the government.
- It acts as the banker and financial advisor to government .
- It supervises the functioning of formal sources of loans.
- It promotes financial inclusion by ensuring that banks give loans not just to profit-making businesses and traders but also to small cultivators, small scale industries, and small borrowers.
- It manages the foreign exchange .
- It is responsible for formulation of the country’s monetary policy .
- It ensures that banks maintain a certain cash reserves at all times.