Explain government bank of the rbi

Functions of the RBI

• The issuer of Currency: The RBI is the only authorized body that can issue currency in the country. So they print, distribute and regulate the flow of currency in the economy.
• Banker to the Government: Even the Central and State government need basic banking functions. The RBI provides them with these facilities like depositing monies, remittances etc. It can also make advances and provide loans to the government whenever necessary.
• Banker to other Banks: The Reserve Bank of India also supervises all other commercial banks in the country. It provides financial assistance to these banks like short-term loans and advances. The RBI also will dictate interest rates and the CRR limits to the commercial banks.
• Regulator of Foreign Exchange: It is the function of the RBI to maintain the value of the rupee in the global economy. It does so by acting as the custodian of foreign exchange reserves in the country. It maintains enough reserves to battle against fluctuations.
• Controls Credit in the Economy: This can be said to be the primary function of the Reserve Bank of India, the control of credit and money in the market. It uses qualitative and quantitative methods to either expand or contract the available credit in the economy according to circumstances.