Consider the following statements regarding the functions of the Reserve Bank of India (RBI):
1. RBI formulates and implements monetary policy to maintain price stability.
2. RBI manages the Foreign Exchange Management Act, 1999.
3. RBI issues currency notes and coins, but not their circulation.

Which of the statements given above are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

Question

Consider the following statements regarding the functions of the Reserve Bank of India (RBI):
1. RBI formulates and implements monetary policy to maintain price stability.
2. RBI manages the Foreign Exchange Management Act, 1999.
3. RBI issues currency notes and coins, but not their circulation.

Which of the statements given above are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

ONLiNE UPSC · Accepted Answer

Statement 1 is correct : The RBI formulates, implements, and monitors the monetary policy with the primary objective of maintaining price stability and promoting economic growth.

Statement 2 is correct : The RBI manages the Foreign Exchange Management Act, 1999, with the objective of facilitating external trade and ensuring the orderly development of the foreign exchange market in India.

Statement 3 is not correct : The RBI issues currency notes (except the one-rupee note, which is issued by the Ministry of Finance) and manages their circulation. It regulates the volume and distribution of currency to meet economic needs. Coins are minted by the Government of India, but the RBI oversees their circulation as part of currency management. It ensures the public has an adequate supply of currency notes and coins in good quality.

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M Question 1	⏱ 0
Consider the following statements regarding the functions of the Reserve Bank of India (RBI): 1. RBI formulates and implements monetary policy to maintain price stability. 2. RBI manages the Foreign Exchange Management Act, 1999. 3. RBI issues currency notes and coins, but not their circulation. Which of the statements given above are correct? (a) 1 and 2 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3