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From the following, choose the correct options as the functions of the Reserve Bank of India.

A. Regulates the reserve requirements of commercial banks.

B. Sterilizes the money supply in the economy against external shocks.

C. Maintains the deposits of the public.

D. Regulates money supply by controlling the stock of high-powered money.

Choose the correct answer from the options given below:

Solution

✅ Correct Option: 1

The RBI regulates reserve requirements like CRR and SLR (A), sterilises money supply against external shocks by offsetting foreign exchange flows (B), and controls money supply by regulating high-powered money (D). It does not maintain deposits of the general public; that is a function of commercial banks, so C is incorrect. Answer: A, B and D only.

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