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Questions
Discuss the role of the Central Bank as the fiscal agent to the government.
How does the central bank act as a fiscal agent to the government?
Solution 1
As a fiscal agent, it performs the following functions:
- It manages the public borrowings.
- It collects taxes and other payments on behalf of the government.
- It represents the government in international financial institutions (such as the World Bank, the International Monetary Fund, etc.) and conferences.
Solution 2
The central bank (RBI) is considered a fiscal agency of the government because it makes and receives payments on behalf of the government. It issues public debt and advises on monetary and financial policies. Thus, the RBI operates as the government's fiscal agent.
RELATED QUESTIONS
Explain the functions of the RBI with respect to the following:
- Custodian of foreign exchange reserves.
- Monopoly of note issue.
- Clearing house facility.
- Banker and fiscal agent to the government.
- In the realm of economic development, how does the role of entrepreneurs impact the overall growth and stability of a nation.
The Central bank is having the authority to regulate the amount of money supply in the economy.
Based on the above explain the following.
- Credit Rationing
- CRR
- Regulation of Margin Requirements
- Bank Rate
Central bank is the ______ of the country's foreign currency reserves.
The ______ is the central bank of our country which has the authority to print currency notes.
What is meant by clearing house function of the RBI?
The main advantage of giving the monopoly right of note issue to the central bank is that it ______.
______ is the main function of central bank.
Identify which of the following is not the function of the central bank?
Which of the following is not a function of a commercial bank?
Which of the following statements are true?
- The Reserve Bank of India is the central bank of the country.
- All currency notes (except one rupee note) bear the signature of Governor, RBI.
- The objective of the Reserve Bank of India is to earn profit.
Identify the function of RBI as indicated by the following image.
Give two reasons why the central banks enjoy monopoly of note issue.
How is Bank rate altered to correct a depression in an economy?
Who normally keep their deposits in the Central Bank?
Explain the banker's bank function of the Central Bank.
Name the institution that enjoys the monopoly of note issue in India.
