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least ` 115 crores should be in gold and the 6) Collection and Publication of Data : RBI
remaining ` 85 crores should be in terms of collects and compiles statistical information
foreign currency and government securities. related to banking and other financial
2) Banker to the Government : RBI acts sectors of the economy.
as a banker, agent and advisor to the 7) Promotional and Developmental
Government. It transacts the business of Functions : RBI also performs certain
both, the Central and State Governments. It promotional and developmental functions
accepts money as well as makes payments such as extending banking services to semi-
on behalf these Governments. It also urban and rural areas, providing security
undertakes the management of public debt. to depositors, development of specialized
It advises the Government on a wide range institutions for agricultural credit, industrial
of economic issues. finance etc.
3) Banker’s Bank : RBI exercises statutory 8) Other Functions : RBI acts as a clearing
control over the commercial banks. All house for settling the accounts between
scheduled banks are compulsorily required its member banks. As a lender of last
to maintain a certain minimum of cash resort, it also provides liquidity to banks
reserves with the RBI against their demand experiencing financial difficulty.
and time liabilities. RBI provides financial Find out :
assistance to banks in the form of discounting Names of the Central Banks of the
of eligible bills. Loans and advances are following countries :
also provided against approved securities.
• USA • UK (United Kingdom)
4) Custodian of Foreign Exchange • CANADA • SWEDEN
Reserves : RBI acts as a custodian of the • RUSSIA • FRANCE
country’s foreign exchange reserves. It has • GERMANY • JAPAN
to maintain the official rate of exchange of
rupee as well as ensure its stability. RBI also • CHINA • AUSTRALIA
undertakes to buy and sell the currencies b) Commercial banks : Commercial banks act
of all the members of the International as intermediaries in the country’s financial
Monetary Fund (IMF). system to bring the savers and investors
5) Controller of Credit : As a supreme banking together. They are profit seeking financial
authority of the country, RBI has the power institutions. Acceptance of deposits and
to influence the volume of credit created granting loans and advances are the
by commercial banks. It also monitors primary functions of commercial banks.
the purpose or use of credit. Quantitative Commercial banks play an important role in
methods such as bank rate, open market mobilizing savings and allocating them to
operations, variable reserve ratios such various sectors of the economy. It includes
as Cash Reserve Ratio (CRR), Statutory both scheduled commercial banks and non-
Liquid Ratio (SLR) etc. control the volume scheduled commercial banks. Scheduled
of credit created. Qualitative methods commercial banks are those included in
such as fixing margin requirements, credit the second schedule of the Reserve Bank of
rationing, moral suasion etc. regulate the India Act, 1934. In terms of ownership and
purpose or use of credit. function, commercial banks in India can be
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