The Reserve Bank of India (RBI) performs several key functions: 1. As the country's central bank and monetary authority, the RBI formulates, implements, and monitors monetary policy to maintain price stability and ensure adequate credit flows. It uses various tools like interest rates, cash reserve ratios, and open market operations to target interest rates and influence the money supply. 2. The RBI issues and destroys currency notes unfit for circulation to effectively act as the sole issuer of India's paper currency. 3. As a banker to banks, the RBI serves as a bank for commercial banks by letting them deposit funds and handle their accounts.

1. CHAPTER 2- RBI(MAIN
FUNCTIONS)

2. 1.Monetary Authority
 Formulates, Implements and monitors the
monetary policy
 Objective-Maintaining price stability and
ensuring adequate flow of credit to
productive sectors

3. What is Monetary Policy?
 Monetary policy is the process by which the
monetary authority of a country controls the
supply of money, often targeting a rate of
interest(changes) for the purpose of
economic growth and stability.
 GOAL-The official goal usually include
relatively stable prizes and low
unemployment, low and stable inflation.
 Monetary policy is associated with interest
rates and availability credit.

4. Monetary Tools
 The reserve banks monetary policy
department (MPD) formulates monetary
policy.
 There are several direct and indirect
instruments that are used in the formulation
and implementation of monetary policy.

5. Monetary tools
DirectTools
1.CASH RESERVE RATIO (CRR)
2.STATUTORY LIQUID RATIO (SLR)
3.REFIANANCE FACILITIES
IndirectTools
1.LIQUIDITY ADJUSTMENT
FACILITY(LSF)
2.REPO RATE
3.REVERSE REPO RATE
4.OPEN MARKET SOLUTION
5.MARGINAL STANDING FACILIIES
6.BANK RATE
7.MARKET STABALIZATION
SCHEME(MSS)

6. 2.ISSUER OF CURRENCY
 The banks issues or destroys currency notes
that are not fit for regulation.
3. Bankers to Banks
 RBI also work as a central bank where
commercial banks are account holders and
can deposit money.

7. 4.Regulator and supervisor
of the financial system
 Prescribes broad parameters of Banking and
financial systems
5. Manager of Foreign
Exchange
 To facilitate external trade and payment and
promote orderly development and
maintenance of foreign exchange market in
India .

8. 6.Developmental Role
 To support National Objectives and Industries
7. Bankers To government
 The Reserve Bank has undertaken the
traditional central banking function of
managing government transactions.

9. 8.Financial Regulation and
Supervision
 The Reserve Bank’s regulatory and
supervisory domain extends not only in the
Indian banking system but also to the-
 Developmental Financial Institutions(DFIs)
 Non Banking Financial Companies(NBFC)
 Primary Dealers, Credit Information
companies and select segments of the
financial Markets.