Podcast
Questions and Answers
What is the main objective of RBI as the Monetary Authority?
What is the main objective of RBI as the Monetary Authority?
- Maintain price stability (correct)
- Ensure high employment rates
- Encourage foreign investments
- Promote economic growth
Which function of RBI aims to facilitate external trade and payments in India?
Which function of RBI aims to facilitate external trade and payments in India?
- Regulator and Supervisor of Payment Systems
- Manager of Foreign Exchange (correct)
- Developmental role
- Issuer of currency
Which function involves introducing safe and efficient payment systems?
Which function involves introducing safe and efficient payment systems?
- Developmental role
- Issuer of currency
- Monetary Authority
- Regulator and Supervisor of Payment and Settlement Systems (correct)
What is the primary role of RBI as a regulator and supervisor of the financial system?
What is the primary role of RBI as a regulator and supervisor of the financial system?
What does RBI aim to ensure by managing the Foreign Exchange Management Act, 1999?
What does RBI aim to ensure by managing the Foreign Exchange Management Act, 1999?
Which function of RBI involves promoting national objectives through various actions?
Which function of RBI involves promoting national objectives through various actions?
What is the purpose of RBI's issuance and management of currency?
What is the purpose of RBI's issuance and management of currency?
Study Notes
Monetary Authority
- Formulates, implements, and monitors monetary policy to maintain price stability while promoting growth.
- Objective: balance price stability with growth.
Regulator and Supervisor of Financial System
- Prescribes broad parameters of banking operations to maintain public confidence in the system.
- Protects depositors' interest and provides cost-effective banking services to the public.
Manager of Foreign Exchange
- Manages the Foreign Exchange Management Act, 1999.
- Facilitates external trade and payment, and promotes orderly development and maintenance of foreign exchange market in India.
Issuer of Currency
- Issues and exchanges or destroys currency and coins not fit for circulation.
- Objective: to provide adequate quantity of supplies of currency notes and coins in good quality to the public.
Developmental Role
- Performs promotional functions to support national objectives.
Regulator and Supervisor of Payment and Settlement Systems
- Introduces and upgrades safe and efficient modes of payment systems to meet the requirements of the public.
- Objective: maintains public confidence in payment and settlement systems.
Related Functions
- Acts as Banker to the Government: performs merchant banking function for central and state governments.
- Acts as banker to the central and state governments.
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Description
Test your knowledge on the main functions of the Reserve Bank of India (RBI) including being the monetary authority, regulator and supervisor of the financial system, and more.
