Assertion (A): Reserve Bank of India acts as an agent of the government
Assertion (A): Reserve Bank of India acts as an agent of the government.
Reason (R): Central Bank has the responsibility of managing the public debt.
Alternatives:
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False
(d) Assertion (A) is False but Reason (R) is True
Anurag Pathak Changed status to publish January 5, 2024
Ans – (a)
Explanation:-
Banker to the Government:- The Reserve Bank of India acts as a banker, agent, and financial advisor to the Central Government and all the State Governments.
As a banker, it carries out all banking business of the government.
- It maintains a current account to keep its cash balances.
- It accepts receipts makes payments for the government and carries out exchange, remittance, and other banking operations.
- It also gives loans and advances to the government for temporary periods. The government borrows money by selling treasury bills to the Central Bank.
As an agent, the central bank also has the responsibility of managing the public debt.
As a financial advisor, the central bank advises the government from time to time on economic, financial and monetary matters.
Anurag Pathak Changed status to publish January 5, 2024
