Gujarat BoardEnglish MediumSTD 12 CommerceEconomicsBANKING AND MONETARY POLICY3 Marks
Question
Why and how does $RBI$ promote banking activities in India?
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Answer
Non-monetary functions of Reserve Bank of India:
Promotional functions:
In India, there are many people who still do not hold bank accounts. Due to this, these people are forced to do all the dealings of money, credit in the unorganized money market.
This creates problem for the $RBI$ to find out exact National Income of country as they do*not have any track of the money transacted.
Thus, due to the above mentioned problems faced by $RBI$, it has to do promotional activities of banks
$RBI$ encourages people to open bank account and also promotes banks to open their branches in the rural areas where people staying there can take benefit of banking services
It also promotes setting up of cooperative banks for the interest of people
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