BANKING AFFAIRS

Detailed explanation-1: -Under the Reserve Bank of India, Act, 1934 (RBI Act, 1934) (as amended in 2016), RBI is entrusted with the responsibility of conducting monetary policy in India with the primary objective of maintaining price stability while keeping in mind the objective of growth.

Detailed explanation-2: -The Reserve Bank of India (RBI) controls the money supply in India. The RBI has control over the monetary policy of India. It controls the interest rates, the reserves to be maintained with the banks to control the money circulation in the economy.

Detailed explanation-3: -Along with the Government of India, the Reserve Bank is responsible for the design, production and overall management of the nation’s currency, with the goal of ensuring an adequate supply of clean and genuine notes in the economy.

Detailed explanation-4: -The Reserve Bank of India, chiefly known as RBI, is India’s central bank and regulatory body responsible for regulation of the Indian banking system. It is under the ownership of Ministry of Finance, Government of India. It is responsible for the control, issue and maintaining supply of the Indian rupee.

Detailed explanation-5: -In order to control money supply, the RBI buys and sells government securities in the open market. These operations conducted by the Central Bank in the open market are referred to as Open Market Operations.