The correct answer is Option 2: Monetizing the government's debt
Explanation:
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Discounting the Bill of Exchange: This is a function related to commercial banks rather than the central bank. The RBI primarily deals with policy and regulatory functions, not individual discounting of bills.
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Monetizing the Government's Debt: This is indeed a correct function of the RBI. It involves the central bank purchasing government securities to provide liquidity, which effectively finances government expenditure and influences the money supply.
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Accepting Deposits from Public: The RBI does not accept deposits from the general public. It deals with banks and financial institutions, not individuals.
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