Daily answer writing assignment

Answer Writing Assignment(10-06-2020)

note: submit your answer in the comment box given below

What are the objectives of Monetary Policy? Explain the functions of the Reserve Bank of India.(150 Words)


  • Monetary Policy is the control mechanism exercised by the Reserve Bank of India.It regulates money circulation throughout the country.

    The following are the objectives of Monetary Policy.
    a) Make the inflation under control
    b) Ensure Price stability
    c) Ensure full employment and sustainable growth
    d) Regulate money supply

    The functions of Reserve Bank of India is briefly outlined below;

    a) Issuer of currency notes :- The legal tender money except one rupee is issued by the RBI.

    b) Banker to Government :- It collects and make payment of funds of Government.

    c) Bankers Bank :- It acts as banker of all banks in the case of acceptance of Cash Reserves and other regulations.
    d) Custodian of foreign reserve :- RBI makes custody of foreign reserves of international currency to deal with the adversity of Balance of Payment.
    e) Lender of last resort :- In times of emergency the banks approach to RBI to lend them money.
    f) Central Clearance and Accounts settlement:- As the banks have deposits with RBI, they can efficiently make clearance settlement with other banks through RBI account.

    • * Good Answer. You have addressed the key demand of the question.

      * Good Introduction. Main body is well structured.

      * Under the sub heading Objectives, you can add more points like Stability of Exchange Rates. More points – you will get more marks.

      * Presentation is also an important factor in Mains Exam. So, please try to write answer in a paper. In that case, you can practice using some flow charts and diagrams.

      * Functions of the RBI are well explained. You can also add some miscellaneous functions of RBI like collection and publishing not all monetary and banking data regularly in its weekly statements, Promotional and Developmental functions etc. It will make your answer stand out from others who have written the same conventional functions.

      * Conclusion is missing. You can mention some recent monetary policy intervention of RBI (eg: taken during Covid19) or other relevant content as conclusion.


      NB: Please try to evaluate and comment on the other answers submitted here. It will enhance your answer writing skills.

    • * The first sentence is enough for the introduction. Limit introduction in 2-3 lines.

      * Objectives of the monetary policy are well written.

      * In your answer, there are two sub heading with same title – Functions of RBI. Try to avoid it

      * No need to write in detail about RBI as that is not the scope of the question.

      * Question is ‘Explain’ the functions. So, instead of writing only points, try to explain each point within 1-2 lines. You have written majority of the points, but you have not explained it.

      * Mentioning of Covid19 in conclusion is appreciated. It would be great if you mention any specific action taken by RBI at that time. It will help you to fetch more marks.


      NB: Please try to evaluate and comment on the other answers submitted here. It will enhance your answer writing skills.

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