GENERAL KNOWLEDGE

Detailed explanation-1: -Functions of RBI (Reserve Bank of India) | Finance & Management. The central bank of India, RBI is also regarded as a bank of banks owing to the functions of RBI. It was established on April 1, 1935, under the Reserve Bank of India Act, 1934.

Detailed explanation-2: -The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.

Detailed explanation-3: -The Banking Regulation Act, 1949 empowers the Reserve Bank of India to inspect and supervise commercial banks. The Reserve Bank of India Act, 1934 requires the Central Government to entrust the Reserve Bank with all its money, remittance, exchange and banking transactions in India and the management of its public debt.

Detailed explanation-4: -It can purchase and discount bills of exchange from commercial banks. It can purchase foreign exchange from banks and sell it to them. It can provide loans to banks and state financial corporations. It can provide advances to the central government and state governments.