Banking Regulation and Monetary Policy

This statement is correct that the RBI is responsible for the overall monetary policy in India. Others are wrong because the RBI is not just like any ordinary commercial bank in India, selective credit control measures affect all banks in a selective manner and A high rate of interest discourages new investment.

 Monetary policy refers to various central bank policies which includes both qualitative as well as quantitative measures that regulates various factors that influence domestic currency directly or indirectly like money supply, interest rates and credit availability in the economy. These measures control the rate of money supply in case inflation or deflation. 

Open market operation (OMO) is a monetary policy by the central bank in which the bank deals in the sale and purchase of securities in the open market to control the supply of money in the economy. By selling the securities, the central bank soaks liquidity from the economy and by buying the securities, the central bank releases liquidity. 

Cash Reserves Ratio (CRR) refers to the proportion of total deposits of the commercial banks which they must keep as reserves with the central bank in the form of cash. If the cash reserve ratio is high, then the bank will have to maintain more amount of cash with the central bank which will reduce their lending capacity and if the cash reserve ratio is low, then the bank will have to maintain less amount of cash with the central bank which will increase their lending capacity. Therefore, Manipulation in cash reserve ratio enables the Reserve Bank of India(RBI) to affect the lending capacity of the commercial banks. 

The Consolidated Fund of India is the primary account for government revenue and expenditure. Under constitutional provisions, certain expenditures charged to this fund are non-votable and thus cannot be discussed or voted upon on the floor of the house.

NABARD is a development financial institution, which functions as a bank. It provides refinance support to other banks and institutions for agricultural and rural development.

The Bank Rate is the rate at which the central bank (RBI) is prepared to buy or rediscount bills of exchange or other commercial paper eligible for purchase under the RBI Act. It serves as a tool for monetary policy.

Small Industrial Development Bank of India (SIDBI) is a development fiscal establishment in India, headquartered at Lucknow and having its offices all over the country. 

Its purpose is to provide refinance facilities and short term lends to industries and serves as the major financial institution in the Micro, Small and Medium Enterprises (MSME) sector. 

SIDBI also, coordinate the functions of institution occupied in similar activities. It was established on April 2, 1990, through an Act of Parliament. It is headquartered in Lucknow. SIDBI operates under the Department of Financial Services, Government of India.

Thus, the correct option is B.

A bank draft is a payment on behalf of a payer that is guaranteed by the issuing bank. A draft ensures the payee  a secure form of payment. During a payer’s reconciliation  of his bank account, he notices a decrease in the account balance because of the money withdrawn from the account.
To obtain a bank draft, a person must first deposit funds equal to the cheque amount with the issuing bank. The bank then generates a cheque to the payee drawn on the bank's own account. The name of the remitter (the person purchasing the cheque) is noted on the check, but the bank itself is the entity making the payment. The cheque is signed by a bank cashier or officer.

The Parekh Committee (headed by Deepak Parekh) recommended that a portion of India's foreign exchange reserves could be utilized for financing infrastructure projects, given the large size of the reserves at the time.

Nationalised banks are authorized by the RBI to accept Foreign Currency Non-Resident (FCNR) deposits from NRIs and Persons of Indian Origin, as they have the necessary infrastructure and regulatory clearance.

RBI adjusts rates like CRR, SLR, and Bank Rate to manage liquidity and control inflation. By changing these, the RBI influences the lending capacity of commercial banks, thereby impacting the money supply and demand in the economy.

The initiative to provide banking services to all villages is a core component of the Financial Inclusion strategy, which aims to bring unbanked populations into the formal banking system.

The Reserve Bank of India was nationalised with effect from 1st January, 1949 on the basis of the Reserve Bank of India (Transfer to Public Ownership) Act, 1948. All shares in the capital of the Bank were deemed transferred to the Central Government on payment of a suitable compensation.

The Committee on Financial Sector Assessment (CFSA) reviewed the entire financial system and recommended reforms across various legal frameworks, including banking, commercial, and taxation laws, to ensure stability and efficiency.