Economics · Central Banking Functions
Which of the following statements is incorrect regarding the banking and monetary framework in India?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Scheduled commercial banks do not earn any interest on their Cash Reserve Ratio (CRR) balances maintained with the RBI.
- 2Open Market Operations (OMO) of the RBI involve the sale and purchase of government securities in the open market.
- 3Commercial banks in India are regulated by the Reserve Bank of India under the Banking Regulation Act, 1949.
- 4The RBI has no role or authority in managing the foreign exchange reserves of the country.✓
Correct answer
The RBI has no role or authority in managing the foreign exchange reserves of the country.
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