{"id":1990,"date":"2024-03-31T00:29:49","date_gmt":"2024-03-30T18:59:49","guid":{"rendered":"https:\/\/lotusarise.com\/qna\/?p=1990"},"modified":"2024-04-03T07:00:57","modified_gmt":"2024-04-03T01:30:57","slug":"q-the-reserve-bank-of-india-regulates-the-commercial-banks-in-matters-of","status":"publish","type":"post","link":"https:\/\/lotusarise.com\/qna\/upsc\/q-the-reserve-bank-of-india-regulates-the-commercial-banks-in-matters-of","title":{"rendered":"Q.\u00a0The Reserve Bank of India regulates the commercial banks in matters of"},"content":{"rendered":"\n<ol class=\"wp-block-list\">\n<li>Liquidity of assets<\/li>\n\n\n\n<li>Branch expansion<\/li>\n\n\n\n<li>Merger of banks<\/li>\n\n\n\n<li>Winding-up of banks<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">Select the correct answer using the codes given below:<\/p>\n\n\n\n<ul class=\"mcq wp-block-list\">\n<li>1 and 4 only<\/li>\n\n\n\n<li>2, 3 and 4 only<\/li>\n\n\n\n<li>1, 2 and 3 only<\/li>\n\n\n\n<li>1, 2, 3 and 4<\/li>\n<\/ul>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"><strong>Answer: (d) 1, 2, 3 and 4<\/strong><\/p>\n<\/blockquote>\n\n\n\n<h5 class=\"wp-block-heading\" id=\"notes-hd-660843a9a7df9\">Notes:<\/h5>\n\n\n\n<ul class=\"wp-block-list\">\n<li>RBI is called the&nbsp;<strong>banker\u2019s bank<\/strong>&nbsp;and&nbsp;<strong>regulates the banking sector<\/strong>&nbsp;in India.<\/li>\n\n\n\n<li>By using mechanisms like CRR, SLR etc, it keeps a check on liquidity of assets of the banks.<\/li>\n\n\n\n<li>Moreover, RBI also sets rules and regulations concerning merger of banks, their winding-up operations and branch expansion.<\/li>\n<\/ul>\n\n\n\n<h5 class=\"wp-block-heading\" id=\"functions-of-the-rbi\">Functions of the RBI:<\/h5>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Monetary Authority:<\/strong>\n<ul class=\"wp-block-list\">\n<li>It implements and monitors the monetary policy and ensures price stability while keeping in mind the objective of growth.<\/li>\n\n\n\n<li>An amendment to&nbsp;RBI&nbsp;Act, 1934, was made in May 2016, providing the statutory basis for the implementation of the&nbsp;<strong>flexible inflation targeting framework.&nbsp;<\/strong><\/li>\n\n\n\n<li>Section 45ZB of the amended RBI Act, 1934, also provides for an empowered six-member&nbsp;<strong>Monetary Policy Committee (MPC)<\/strong>&nbsp;to be constituted by the Central Government by notification in the Official Gazette.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Regulator and Supervisor of the Financial System:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Prescribes broad parameters of banking operations within which the country\u2019s banking and financial system functions such as issuing licenses, branch expansion,&nbsp;liquidity&nbsp;of assets,&nbsp;amalgamation&nbsp;of banks etc.<\/li>\n\n\n\n<li>Objective: maintain public confidence in the system, protect depositors\u2019 interest and provide cost-effective banking services such as commercial banking, co-operative banking, to the public.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Manager of Foreign Exchange:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Manages the Foreign Exchange reserves of India.<\/li>\n\n\n\n<li>It facilitates external trade and payment and promotes orderly development and maintenance of foreign exchange market in India.<\/li>\n\n\n\n<li>It also maintains external value of rupee.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Issuer&nbsp;of Currency:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Issues and exchanges or destroys currency and coins not fit for circulation.<\/li>\n\n\n\n<li>Objective: to give the public adequate quantity of supplies of currency notes and coins and in good quality.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Developmental Role:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Performs a wide range of promotional functions to support national objectives such as making institutional arrangements for rural or agricultural finance.<\/li>\n\n\n\n<li>Commercial banks lend loans to small-scale industrial units as per the directives (Priority Sector Lending) issued by the Reserve Bank of&nbsp;India&nbsp;time to time.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Financial Inclusion:<\/strong>\n<ul class=\"wp-block-list\">\n<li>The Reserve Bank has selected a\u00a0bank led\u00a0model for financial inclusion in India. RBI has undertaken a series of policy measures. Some of the important ones are:\n<ul class=\"wp-block-list\">\n<li><strong>No Frills Accounts \u2013<\/strong>&nbsp;account either with nil or very low minimum balance as well as charges that would make such accounts accessible to vast sections of&nbsp;population.<\/li>\n\n\n\n<li><strong>Use of Technology \u2013<\/strong>&nbsp;devices such as ATMs,&nbsp;hand held&nbsp;devices to identify user accounts through a card and biometric identifier,&nbsp;Deposit taking&nbsp;machines and Internet banking and Mobile banking facility to provide the banking services to all sections of society with more ease.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Related Functions:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Banker to the Government: performs merchant banking function for the central and the state governments.<\/li>\n\n\n\n<li>It is entrusted with central govt.\u2019s money, remittances, exchange and manages its public debt as well.<\/li>\n\n\n\n<li>Banker to banks: maintains banking accounts of all scheduled banks. It also acts as&nbsp;lender&nbsp;of last resorts by providing&nbsp;fund&nbsp;to banks.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Select the correct answer using the codes given below: Answer: (d) 1, 2, 3 and 4 Notes: Functions of the RBI:<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[1,3],"tags":[38],"years":[60],"class_list":["post-1990","post","type-post","status-publish","format-standard","hentry","category-upsc","category-prelims","tag-indian-economy","years-60"],"acf":[],"taxonomy_info":{"category":[{"value":1,"label":"UPSC"},{"value":3,"label":"Prelims"}],"post_tag":[{"value":38,"label":"Indian Economy"}],"years":[{"value":60,"label":"2013"}]},"featured_image_src_large":false,"author_info":{"display_name":"LotusArise","author_link":"https:\/\/lotusarise.com\/qna\/author\/team-lotusarise"},"comment_info":0,"category_info":[{"term_id":1,"name":"UPSC","slug":"upsc","term_group":0,"term_taxonomy_id":1,"taxonomy":"category","description":"","parent":0,"count":1269,"filter":"raw","cat_ID":1,"category_count":1269,"category_description":"","cat_name":"UPSC","category_nicename":"upsc","category_parent":0},{"term_id":3,"name":"Prelims","slug":"prelims","term_group":0,"term_taxonomy_id":3,"taxonomy":"category","description":"","parent":1,"count":1251,"filter":"raw","cat_ID":3,"category_count":1251,"category_description":"","cat_name":"Prelims","category_nicename":"prelims","category_parent":1}],"tag_info":[{"term_id":38,"name":"Indian Economy","slug":"indian-economy","term_group":0,"term_taxonomy_id":38,"taxonomy":"post_tag","description":"","parent":0,"count":225,"filter":"raw"}],"_links":{"self":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/1990","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/comments?post=1990"}],"version-history":[{"count":0,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/1990\/revisions"}],"wp:attachment":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/media?parent=1990"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/categories?post=1990"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/tags?post=1990"},{"taxonomy":"years","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/years?post=1990"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}