Reserve Bank of India (RBI) is the apex institution of the country which controls and regulates all other institutions are commercial banks under it. Regulatory institution which looks after the inflation and deflation in the country and mobilizes it.

Reserve Bank of India plays many roles in order to maintain the balance in the country and in order to assist the government and other subsidiary banks under its control. They are:

1. Currency issuing authority: RBI is the sole authority to issue currency in India. RBI issue the currency notes and also coins except one rupee coin. In RBI to department namely issue department and banking department. Issue department will issue the currency notes for circulation and the banking department will be to draw the existing currency from the circulation and also introduced the currency to circulation and regulate the balance of money.
2. Acts as Banker to the banks: as RBI regulate all other banks under its control posing some rules and regulations and maintains the activities of all its subsidiary banks so it acts as a banker to all the banks.
3. Acts as banker to the government: RBI assistant Government of India in maintaining its books of accounts it will suggest the government in the financial matters and also well borrowing the loans from international monetary fund and other international institutions.
4. Custodian of foreign exchange reserve: RBI will act as a custodian of foreign exchange as it is assisting government in taking loans from international monetary fund it is necessary for RBI to maintain the member currencies of the international monetary fund. So it enable the smooth flow of currency and convertibility.
5. Lender of last resort: when commercial bank are in situation where they need money then they will approach RBI for the money and hands RBI will lend money to the commercial banks as it acts as a lender of last resort.
6. Credit control: RBI Bank control the credit in the country by regulating the inflation and deflation situations and posing the the rules in the rates of the interest charged. So that there will be a Balance of payments in the country.
7. Acts as a clearing house: RBI will clear the interbank transaction settlement as well as it clears the checks of the commercial banks and and acts as a clearinghouse.
8. Promotional function: abhi I will also do the promotional function in promoting its activities and the the rate of loans and interest charged in order to attract the customers in the rural and urban areas to involve mostly in the banking activities.