Reserve Bank of India as Banker to the Government to Scheduled Commercial Banks

Reserve Bank of India as Banker
Reserve Bank of India 2014 was established on 1st April, 1935 under Reserve Bank of India Act, 1934It was established as a shareholders Bank with paid up capital of Rs. 5 The ownership of the Bank was transferred to the Central Govt. from 1st January, 1949.

Credit Control Function

Currency Notes Issue  

CURRENCY AUTHORITY Sole authority for issue of currency in India One rupee coin/ notes and other coins are issued by RBI on behalf of the Government RBI’s responsibility is to put currency into circulation, exchange it or withdraw it. The RBI has the sole right or authority or monopoly of issuing currency notes except one rupee note and coins of smaller denomination. Gold coin and bullion, foreign securities, Rupee Coin, Government of India Rupee Securities of any maturity and bills of exchange and promissory notes payable in India Liability

BANKER TO THE BANKS

Maintaining the balances of scheduled banks and deposits of non-scheduled and cooperative banks Rediscounting of eligible bills for granting loans and advances to Scheduled Commercial Banks, State Cooperative Banks, RRBs and financial institutions .The above functions are carried out by the Deposit Accounts Departments at various office.  The RBI being an apex monitory institution has obligatory powers to guide, help and direct other commercial banks in the country. The RBI can control the volumes of banks reserves and allow other banks to create credit in that proportion

Banker to the Government

It involves  issue and retirement of loans, payment of interest, and all matters pertaining to debt certificate and registration of debt holding

The RBI being the apex monitory body has to work as an agent of the central and state governments. It performs various banking function such as to accept deposits, taxes and make payments on behalf of the government. A large number of branches of agency banks and treasury agencies also undertake government business on behalf of RBI as the RBI offices are located mainly at state capitals

The Government Revenue collected through agency banks

MANAGEMENT OF FOREIGN EXCHANGEM

It is an essential function of the RBI. In order to maintain stability in the external value of rupee, it has to prepare domestic policies in that direction. the foreign exchange restrictions have been almost removed on current accounts and the external value of the rupee is determined by the market forces.