RBI can be expanded as Reserve Bank of India. It is Indian Central Bank. RBI occupies a pivotal position in the monetary and banking structure of the country. RBI controls and regulates the monetary banking and credit policies of the country. RBI performs the following functions

1. Issue of currency notes – RBI enjoys the monopoly and exclusive rights for issuing notes. The currency notes issued by RBI are declared unlimited legal tender throughout the country. However, it has to maintain certain reserves of foreign exchange and gold to back the issue of notes as required by law.
2. Banker’s Bank – It also act as banker’s bank. Commercial banks are required to keep certain portion of their total deposits in the form of cash reserves with RBI.
3. Government’s agent and advisor – The RBI provides banking facilities to the Government just as commercial banks provide banking services to the public.
4. Monetary Policy Formulation – The main function of RBI is to formulates and implements the monetary price stability across the country while priortizing economic growth of our country.
5. Lender of the last resort – During crises, commercial banks may approach RBI for funds as it is the lender of the last resort.
6. National Clearing House – RBI keeps the cash balances of all commercial banks. It settles the claims of commercial banks.
7. Controlling Money Supply – The main function of RBI is to regulate or control the flow of money supply to maintain inflation or price level and interest rates across the country.
8. Custidian of metallic and foreign exchange reserve – RBI acrs as the custodian of nation’s gold reserves and foreign exchange.
9. Controller of Credit – RBI is the controller of cerdit system in the country.

The RBI performs the above functions to achieve the main objectives of economic development of the country. It also regulates the supply of money to control the price level and interest rates.