The significances of the Reserve Bank of India are discussed below :
(i) It issues currency notes on behalf of the central government.
(ii) It supervises the functioning of formal source of loans. RBI monitors the banks and ensure that they maintain minimum reserves as per the guidelines of Central Bank.
(iii) It also sees that banks give loans not just for profit making to traders but also to small borrowers, small cultivators etc.
(iv) Periodically banks have to submit information to RBI on how much they are lending, to whom, at what interest rate, etc.
(v) When commercial bank fails to get financial accommodation from any where, it approaches Central Bank as a last resort. Central Bank advances loan to such banks against approved securities. It ensure that the banking system of the country does not suffer from any setback and money market remains stable.
(vi) It acts as a banker to the governmentand is the custodian of the foreign exchange reserves of the economy.