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Questions
With the help of an example, explain the clearing house functions of RBI.
Explain the work of "banker's clearing house."
Solution
- The Reserve Bank of India (RBI) operates as a clearing house, allowing for the efficient and secure settlement of interbank transactions.
- For example, if a customer from Bank A sends a cheque to a customer from Bank B, the RBI acts as a go-between to ensure that the cheque amount is deducted from Bank A and credited to Bank B.
- The RBI clears and settles the transaction, ensuring that interbank fund transfers occur smoothly and on time.
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Read the below case and answer the question that follow:
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In a 40 minute long speech Prime Minister Narendra Modi announced the demonetisation of existing notes of ₹ 500 and ₹ 1,000 during a televised address on Tuesday evening. - "What is demonetisation and why was it done?" |
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Explain any five functions of the RBI in context with the Indian economy.
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