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Economics · 2026 · 3 marks
CBSE 2026 · Region 1 · Set 1 · Q12
"Under the provisions stated in the Section 20 and Section 21 of the Reserve Bank of India (RBI) Act, 1934, the RBI is mandated to handle the banking…
"Under the provisions stated in the Section $\displaystyle 20$ and Section $\displaystyle 21$ of the Reserve Bank of India (RBI) Act, $\displaystyle 1934$, the RBI is mandated to handle the banking operations of the Government of India."In the light of the given statement, elaborate the indicated function of the Reserve Bank of India.
Marking-scheme solution
The Reserve Bank of India (RBI) serves as banker to the government, managing its accounts, receiving deposits and processing payments. Exchanges, remittances and various banking operations are facilitated by the RBI on behalf of the government.In addition to this, during any financial crisis, RBI provides credit to the government to ensure its smooth functioning and to support the state in managing its obligations effectively.
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CBSE Class 12 Economics past-paper question from the 2026 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.