ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The main sources of funds for internal debts are commercial banks and other financial institutions. Internal public debt owed by a government (money a government borrows from its citizens) is part of the country’s national debt.

Detailed explanation-2: -As the debt manager of the central and state governments, the mandate of the Reserve Bank is to manage the government market borrowing programme in a non-disruptive manner while keeping in mind the objective of cost optimisation, risk mitigation and market development.

Detailed explanation-3: -External debt sources are foreign commercial banks, governments, and international financial institutions. Some popular institutions are the World Bank and IMF. The sources of internal debt are domestic financial institutions, like commercial banks.

Detailed explanation-4: -(i) In terms of Section 20 and 21 of the RBI Act, management of the public debt of the Government of India and the issuance of new loans is vested with the Reserve Bank of India.