The Reserve Bank of India is India's central bank, which controls the issue and supply of the Indian rupee. RBI is the regulator of entire Banking in India. RBI plays an important part in the Development Strategy of the Government of India.
Aparta from this RBI has an important role in business also.
Current Policy: The RBI is responsible for the monetization of the economy. Adequate money supply is critical for the functioning of the economy. All the factor incomes in modern economy are in fact money incomes. Business's revenue too monetised. Moreover, the RBI also overseas the availability of foreign currency to facilitate overseas business transactions.
Credit Policy: The RBI does not fund the business or for that matter any activity. However, it's policies have a major impact on channelisation of the banking resources for the business, generally as well as specially for certain sectors. A small reduction in the statutory liquidity ratio(LSR), cash reserve ratio(CRR) or bank rate can put huge fund at the disposal of the commercial banks for lending to business and others sectors.
Development of the Financial System: Finance is sad to be the life blood of Business. And a well developed financial system is regarded as the sine qua non ( an absolute imparative) for economic development. RBI may be regarded as the heart of financial system. It overseas the functioning and outreach of the commercial banks as well as non banking finance companies.
Funds Transfer and Payments Mechanism: Making and receiving payments is... (More)