UNIT-1 PART 3

Question 1

What are the two main roles of the Reserve Bank of India (RBI)?

Answer 1

Regulatory and Developmental roles.

Question 2

What is the main goal of RBI’s regulatory role?

Answer 2

Ensuring financial stability through policies like managing money supply and controlling inflation.

Question 3

What is the purpose of RBI’s developmental role?

Answer 3

Promoting financial inclusion and supporting sectoral growth.

Question 4

Name the 5 key regulatory functions of RBI.

Answer 4

Monetary policy management

Bank supervision

Currency issuance

Foreign exchange management

Payment system oversight

Question 5

What does RBI’s currency issuance role involve?

Answer 5

Issuing and maintaining the quality and circulation of Indian currency.

Question 6

How does RBI manage foreign exchange?

Answer 6

By regulating transactions and managing forex reserves to stabilize the rupee.

Question 7

Mention 3 developmental roles of RBI

Answer 7

Promoting financial inclusion

Supporting priority sectors

Developing financial markets

Financial literacy initiatives
Establishing specialized institutions