Which is Not the Function of the Reserve Bank of India?

Essential Facts of Functions of Reserve Bank of India

Check the essential functions of RBI that help the economy in their smooth functioning below:

• Issue of Bank Notes- RBI has sole authority to issue currency notes except one rupee note. It prints and manages currency in India.
• Custodian of Cash and Foreign Currency Reserves- It has the custody of cash reserves of commercial banks. Commercial banks keep deposits in RBI. RBI is the custodian of the country's foreign currency reserves too. It enables the Reserve Bank to deal with crises connected to the balance of payments.
• Banker to Government- Reserve Bank maintains and operates government deposits. It represents the Government of India as a member of the IMF and World Bank. It provides short-term loans whenever necessary. It collects receipts of funds and makes payments on behalf of the government.
• Banker to Banks- It enables seamless clearing and settlement of interbank transfers. It operates through e-Kuber. It provides short-term loans and advances to selected banks whenever it seems necessary and appropriate.
• Controller of Credit- It is a significant monetary policy weapon to control the economy's liquidity. RBI regulates commercial banks' credit through CRR, bank rate, and open market operations. Managing credit prevents the inflation rate within the economy.
• Lender of Last Resort- It comes to the rescue of banks which faces liquidity problems. It supplies liquidity when no one is willing to extend credit. It raises such a facility to protect the interests of depositors of banks and prevent its failure.

Summary:

Which is not the Function of the Reserve Bank of India?

Reserve Bank of India is like a Banker to Banks. It helps the banks perform their jobs without difficulty and supports the government in monetary policies. Through its diverse functions, it maintains the financial stability of the economy. It uses various tools and implements them, following the country's economic priorities. It is the sole regulator and supervisor of the financial system.

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