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Q54 (IAS/2001) Economy › Money, Banking & Inflation › Government securities debt Answer Verified

Consider the following statements regarding Reserve Bank of India : I. It is a banker to the Central Government. II. It formulates and administers monetary policy. III. It acts as an agent of the Government in respect of India’s membership of IMF. IV. It handles the borrowing programme of Government of India. Which of these statements are correct ?

Result
Your answer: —  ·  Correct: C
Explanation

All four statements are correct. The RBI acts as banker to the Central and state governments and maintains their accounts and provides temporary finance such as Ways and Means Advances [1]. It formulates and administers monetary policy, takes decisions on policy stance and issues monetary policy statements under the monetary policy framework [2]. The RBI also acts as the Government of India’s agent in dealings with international financial institutions and represents India’s membership in the IMF and similar bodies [3]. Historically and functionally the RBI manages public debt and handles government borrowing operations and issuance of government securities on behalf of the government [4].

Sources

  1. [1] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 4. Management of Foreign Exchange Reserves > p. 68
  2. [2] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2.13 Monetary Policy > p. 60
  3. [3] https://vijayacollege.ac.in/wp-content/uploads/2022/02/U3-Regulatory-Institutions.pdf
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SIMILAR QUESTIONS

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