Functions of R.B.I.
1. A monopoly of Note issue: RBI has the monopoly of issuing currency notes of Rs 2 and above, namely Rs 5, Rs 10, Rs 20, Rs 100, Rs 200, Rs 500, and Rs 2000. One Rupee is issued and circulated by RBI on behalf of the Central Government.
2. Banker to Government: The RBI accepts the deposits of Central and State Governments, collects money (like taxes and other charges) and also makes payments on behalf of the Government.
3. Bankers’ bank: It also acts as the bank for all banking institutions in the country. All the banks of the country have to keep a predetermined part of their deposits as reserves with the RBI.
4. National Clearing House: RBI acts as the clearinghouse for the settlement of transactions across banks. This function helps banks to settle their inter banks claims easily.
5. Controller of credit: The RBI regulates the amount of credit issued by the banks, according to the monetary situation of the country.
Custodian of Foreign Exchange Reserves.
Promotion of Banking Habits.
