IMPORTANT POINTS ON RBI

 RBI is not expected to perform the function of accepting  deposits from the general public. 

 RBI has its headquarters at Mumbai. 

 Prime lending rate is not decided by RBI. 

 Prime lending rate is decided by the individual banks. 

 RBI decides the following rates namely; Bank rate, repo rate,  reverse repo rate and cash reserve ratio. 

 RBI was set up on the recommendations of Hilton Young  commission. 

 The quantitative instruments of RBI are – bank rate policy,  cash reserve ratio and statutory liquidity ratio. 

 The objective of monetary policy of RBI is to control inflation; discourage hoarding of commodities and  encourage flow of credit into neglected sector. 

 When RBI is lender of the last resort, it means that RBI  advances credit against eligible securities. 

 Government of India decides the quantity of coins to be  minted. 

 The method which is used currently in India to issue  currency note – minimum reserve system. 

 For issuing notes, RBI is required to hold the minimum reserves of Rs. 200 crore of which note less than Rs. 115 crore is to be held in gold. 