Question: Who is the monetary authority of the country and what is its role?
- Reserve Bank of India is the monetary authority of country. It acts as a banker to the government. RBI formulates implements and monitors the monetary policies as well as it has to ensure an adequate flow of credit to productive sectors.
- RBI acts as issuer of the currency.
- RBI also performs promotional functions to support national objectives and industries
- RBI is lender to last resort
- RBI act as a Banker bank.