Banking · Monetary Policy Framework & RBI Act
Which specific section of the Reserve Bank of India Act, 1934, empowers the RBI to transact various types of business in the financial market, thereby providing statutory enablement for operations like LAF to target the Weighted Average Call Rate?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Section 21 which mandates the central government to entrust the bank with all its money, remittance, and exchange.
- 2Section 17 which specifies the various types of business that the bank may transact in the market.✓
- 3Section 45-ZB which outlines the constitution of the Monetary Policy Committee and its primary mandates.
- 4Section 42(1) which deals with the cash reserve ratio requirements of scheduled banks.
Correct answer
Section 17 which specifies the various types of business that the bank may transact in the market.
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