Question

Identify, which one of the following is not a function of Reserve Bank of India as a bank, agent and advisor to the government.

• A. Carries out banking business of the government
• B. Manages national debt
• C. Advises on financial matters
• D. Conducts periodic inspections

Hint:

RBI as banker, agent, and advisor deals with government finances, while inspection is part of its supervisory function.

Answer 1

The Correct Option is D

Concept: Functions of RBI
The Reserve Bank of India (RBI) performs multiple roles in the economy. One of its important roles is acting as:

• Banker to the government
• Agent of the government
• Advisor to the government

These roles help in managing the financial operations and policy framework of the government.
Step 1:Functions under this role
Under its role as banker, agent, and advisor to the government, RBI performs the following functions:

• Maintains and operates government accounts
• Receives and makes payments on behalf of the government
• Manages public debt by issuing government bonds and treasury bills
• Acts as an agent in handling financial transactions of the government
• Provides economic and financial advice to the government on policy matters

Step 2:Identify incorrect option
Conducting periodic inspections:

• Is related to RBI's role as a controller and supervisor of commercial banks
• Ensures proper functioning and regulation of the banking system
• Does not fall under its role as banker, agent, or advisor to the government

Conclusion: \[ \text{Option (D) is correct} \]