BANKING AFFAIRS

Detailed explanation-1: -A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the monetary base.

Detailed explanation-2: -The Reserve Bank of India is the central bank of the country.

Detailed explanation-3: -A central bank is a public institution that is responsible for implementing monetary policy, managing the currency of a country, or group of countries, and controlling the money supply.

Detailed explanation-4: -A central bank also acts as the regulatory authority of a country’s monetary policy and is the sole provider and printer of notes and coins in circulation.

Detailed explanation-5: -Thus, Reserve Bank acts as a common banker, known as ‘Banker to banks’ function, the operational instructions for which are issued by concerned central office departments of the Reserve Bank. Among other provisions, the Reserve Bank stipulates minimum balances to be maintained by banks in these accounts.