Question

The ______ manages the public debt of Central and State Governments.
1. Bank of India
2. State Bank of India
3. Reserve Bank of India
4. Union Bank of India

Answer 1

Correct Answer - Option 3 : Reserve Bank of India

The correct answer is the Reserve Bank of India.

• The Reserve bank of India manages the public debt of central as well as state governments.

• Reserve Bank of India is the Central bank of India and plays an important role to maintain the economy in various ways.
• It issues new currency notes, interest payments, and repayment of loans.
• The total amount borrowed by the government is known as Public debt.
• The list of main sources of Public Debt is government securities or G-secs, Treasury Bills or T-bills, External Assistance, Short term borrowings, Public Debt definition by Union Government.

• Functions of RBI include:
  • Issue of Bank Notes
  • Banker to Government i.e. manages the banking needs of the government
  • Represents the Government of India as a member of the IMF and the World Bank
  • Custodian of Cash Reserves of Commercial Banks
  • Custodian of Country’s Foreign Currency Reserves
  • Lender of Last Resort
  • Controller of Credit i.e. Managing money supply (Liquidity)
• General information about RBI:
  • Headquarters- Mumbai
  • Governor- Shaktikanta Das (present)
  • Established on 1 April 1935 in Kolkata
  • Moved to Mumbai in 1937