What are the Different Responsibilities of the RBI Governor?

One of the biggest responsibilities that lie with the central banks around the world is to monitor and regulate the flow of money in the economy. However, in India, the central bank i.e. the Reserve Bank of India has additional responsibilities in comparison to other countries which make its operations slightly more complex and difficult.

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The RBI governor has a myriad of responsibilities, some of which are:

• To improve the growth rate, the RBI governor often slashes the interest rates so that more people apply for home loans, car loans etc. and more companies make investments.
• To ensure that the inflation rate doesn’t fall out of the 2% to 6% range in the next 5 years, a 6-member panel chaired by the RBI governor makes important decisions on the interest rates.
• RBI is the chief watchdog for the banks in India, and as its head, the governor has to monitor and regulate the funds transfer systems used by the banks. He also takes action for the lenders that are struggling with their finances and need help.
• The governor also makes the key decisions on the issuance of new and old currency notes and coins in the economy. He is also responsible for curbing fake currency in the system.
• Since the government’s banking transactions are managed by the RBI, the governor is also the banker for the government.
• The RBI governor is also responsible for supervising the co-operative banks that hold a high significance for the rural areas in the country.