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Who is the monetary authority of the country and what is its role?

Important banking qna for banking aspirants, which is helpful in banking exam.

Dec 30, 2014 14:32 IST
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Question: Who is the monetary authority of the country and what is its role?

Answer:

  • 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.

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