KMC COLLEGE OF LAW,

TIRUPUR

ASSIGNMENT

SUBJECT : GENERAL PRINCIPLES OF ECONOMICS

SUBJECT CODE : FA1C

ASSIGNMENT TOPIC : FUNCTIONS OF RBI

ASSIGNMENT NUMBER : 01

NAME : KARTHI.M

COURSE : 1ST YEAR B.A.LLB

DATE OF ISSSUE OF ASSIGNMENT : 12-02-2024

DATE OF SUBMISSION : 24-02-2024

SUBMITTED TO - PROF. KRISHNAN.R

SUBMITTED BY ,

NAME : KARTHI.M

BATCH : 2023- 2028

COURSE : B.A.LLB

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 FUNCTIONS OF RBI

Table of Contents
FUNCTIONS OF RBI............................................................................................................................2
Objective of the study:........................................................................................................................2
Introduction:........................................................................................................................................2
Review of literature:............................................................................................................................3
History of the study:............................................................................................................................3
Analysis of the study:..........................................................................................................................3
Function of RBI...............................................................................................................................3
Monetary authority:....................................................................................................................3
The issuer of currency:................................................................................................................3
The issuer of banking license:.....................................................................................................3
Banker to the government:.........................................................................................................4
Banker’s bank:.............................................................................................................................4
Conclusion:..........................................................................................................................................4
Bibliography:.......................................................................................................................................4
Webliograpy:.......................................................................................................................................4

Objective of the study:

The object of the study of below essay is to understand functions of RBI. This study helps us
to known the functions of RBI. The Reserve Bank of India (RBI) is the central banking
institution in India responsible for regulating the country’s monetary policy and financial
system. It can be clearly studied by the below articles with references.

Introduction:
The Reserve Bank of India was established on April 1, 1935 in with Reserve Bank of India
Act,1934. The central office of Reserve Bank was established in Kolkata but permanently
moved to Mumbai in 1937. It is originally privately owned, since nationalization in 1949, the
Reserve Bank of India fully owned by the Government of India.

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Review of literature:
In the literature, that is general recognition in that monetary policy affects the real economy
at least in the short run. However, there is no on that channel which monetary policy
influence the behavior of outputs and prices.

In recent years monetary policy has been an issue extensive research particularly since
Bernanke’s seminal article in 1986 which provide alternative explanation of real and nominal
source price for explaining money income relationship.

History of the study:

The RBI Act 1934 was passed and RBI launched in the operations from April 1,1935. The
head office of the RBI was in Calcutta and moved to Mumbai in 1937.

After the independence the government of India passed the Reserve Bank Act, 1948. From
January 1, 1949, RBI started as a government owned central bank. The Reserve Bank of India
was established on April 1, 1935.

Analysis of the study:

Function of RBI
Monetary authority:
Its controls the supply of money in the economy to stabilize exchange rate, maintaining the
health of balance of payment and control inflation.

The issuer of currency:

Reserve Bank of India maintain the currency and credit system of the country. It has the
authority to issue currency.

The issuer of banking license:

As per sec 22 of banking regulation act, every bank has to get a banking license from RBI to
run bank in India.

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Banker to the government:
Its acts as banker for both central and the state governments and its provides short-term
credit. It manages all government loans, servicing the government debt.

Banker’s bank:
RBI is the bank of all banks in India as it provides loan to banks, accept the deposits of
banks, and rediscount the bills of banks.

Conclusion:
The Reserve Bank of India(RBI) plays an important role in country’s financial and economic
systems. The RBI contributes to maintaining price stability, promoting economic growth, and
the stability of the financial sector. RBI is also responsible for regulating and controlling the
monetary and financial system.

Bibliography:
(2018). In HIGHER SECONDARY FIRST YEAR,COMMERECE (p. 89). Tamil
NaduTextbook and Educational corporation.

(2019). In HIGHER SECONDARY SECOND YEAR, ECONOMICS (pp. 102-103). Tamil

Nadu Text Book and Educational Corporation.

Webliograpy:
google. (2012, may 18). Retrieved from Reserve Bank of India:

https://rbi.org.in/scripts/PublicationsView.aspx?id=14235

google crome. (n.d.). Retrieved from Reserve Bank of India:

https://www.rbi.org.in/commonperson/English/Scripts/Organisation.aspx#:~:text=Reserve
%20Bank%20of%20India&text=The%20Reserve%20Bank%20of%20India,moved
%20to%20Mumbai%20in%201937

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