Answer in detail

Explain in detail about the role of RBI in the country.

RBI is a central bank of India and it plays a measure role in Indian economy by taking various measure to maintain currency circulation, interest rates, inflection etc. some of its major roles are mentioned below

• Issue currency – RBI through its presses and minting units , print currency notes and coins on time to time to maintain currency flow in the country which is important for doing transactions,. RBI takes a decision about a number of different denominations of notes to be printed.

• Monetary policy – RBI controls the monetary policy and through this policy it manages the exchange rates to control financial stability and inflation in the country.

• Banking licences – RBI issues licences to new banks to starts banking and other financial services which provides the facility of deposit and loan to the general public

• Bankers bank: RBI accepts deposits from the banks and provides loan to them

• Clearing house – RBI act as a central processing unit to maintain transaction cross different banks

• Foreign exchange: RBI is the regulator of foreign exchange and its maintains reserve of foreign exchange and gold for the stability of the economy

• Fair practices codes : RBI formulate practice for lenders to safeguard the interest of borrowers