As a central bank, the Reserve Bank has significant powers and duties to perform. For smooth and active progress of the Indian Financial System, it has to perform some primal tasks. Among opposites it includes maintaining monetary and financial stability, to develop and maintain stable salary system, to promote and develop financial infrastructure and to regulate or control the financial institutions.
For simplification, the functions of the Reserve Bank are categorise into the traditional functions, the development functions and supervisory functions.
handed-down Functions of RBI ?
Traditional functions are those functions which every central bank of each realm performs all over the world. Basically these functions are in plication with the objectives with which the bank is set up. It includes fundamental functions of the Central Bank. They comprise the following(a) tasks.
1.Issue of Currency Notes : The RBI has the sole right or license or monopoly of issuing funds notes except one rupee note and coins of smaller denomination. These currency notes are legal tenderise issued by the RBI. Currently it is in denominations of Rs. 2, 5, 10, 20, 50, 100, 500, and 1,000.
The RBI has powers not only when to issue and withdraw but even to transfer these currency notes for other denominations. It issues these notes against the security of gold bullion, foreign securities, rupee coins, exchange bills and promissory notes and government of India bonds.
2.Banker to other Banks : The RBI being an peak monitory institution has obligatory powers to guide, help and direct other commercial banks in the country. The RBI can control the volumes of banks reserves and allow other banks to create credit in that proportion. all(prenominal) commercial bank has to maintain a part of their reserves with its parents viz. the RBI. Similarly in need or in urgency these banks approach the RBI for fund. Thus it is called as the lender of the...If you want to get a full essay, order it on our website: Ordercustompaper.com
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