Question

Which function of RBI deals with regulation of money supply and credit?

• A. Supervisory function
• B. Promotional function
• C. Monetary function
• D. Developmental function

Answer 1

Answer:

C. Monetary function

Under its monetary function, RBI controls liquidity, credit, and interest rates in the economy. It uses tools like repo rate, reverse repo rate, cash reserve ratio (CRR), and open market operations to regulate money supply and maintain economic stability.