Financial Institutions and role of RBI

Financial Institutions and role of RBI

What do you understand by the term “financial institution”?

It is an organization that conducts financial transactions like investments, loan and deposits. Starting from depositing money to exchanging currencies, everything is done through financial institutions.

Which are the main financial institutions in India?

- Reserve Bank of India
- Securities and Exchange Board of India
- National Stock Exchange
- Bombay Stock Exchange
- Foreign Investment Promotion Board

What is the role of RBI in India?

Reserve Bank of India– It is also known as the central bank of the country. It was established in 1935 under the RBI Act of 1934.


- helps control the money supply.
- monitors GDP (Gross Domestic Product) and inflation.
- helps maintain the confidence of people in the financial system.
- publishes periodical reviews related to banking.
- acts as a regulator of financial system.
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