Who is the central banking authority in India?
The central banking authority in India is Reserve Bank of India. RBI has two main functions namely – monetary control including controlling inflation and supervision.
This is ensured through offsite and onsite surveillance of banks. Monetary control is exercised by means of cash reserve ratio and statutory liquidity ratio. These ratios are called as reserve ratios.
Bank rate and repo rate are termed as policy rates and they are main instruments of RBI for the purpose of controlling the prime rates of banks.
The central bank regulates the money market through monetary instruments namely; CRR, SLR, Bank rate and repo rate. Other functions of central banking authority are acting as referee and lender of the last report.
The other functions of RBI are – lender of the last resort, banker to the government, banker to banks, acting as a referee, maintenance of clearing system, creation of currency holding chests and mechanisation of transfer of funds
