Question
The "International Department" of the Reserve Bank of
India (which encompasses international monetary relations and external debt monitoring) functions primarily as:Solution
The RBI's International Department (often working in conjunction with the Internal Debt Management Department and the Ministry of Finance) plays a critical role in India's global financial positioning. 1. Coordination with International Bodies: The RBI acts as the representative and "Alternate Governor" to the International Monetary Fund (IMF) . It handles the operational aspects of India's membership, including Special Drawing Rights (SDRs) and participation in IMF's data dissemination standards (like the SDDS). 2. External Debt Management: While the Ministry of Finance manages sovereign external debt, the RBI is responsible for monitoring and compiling data on total external debt , which includes:
- Commercial borrowings (ECBs).
- Non-resident deposits (NRI deposits).
- Short-term trade credits.
- Coordination of the External Debt Management Unit (EDMU) .
- Option A: Bilateral trade agreements and tariffs are handled by the Ministry of Commerce and Industry , not the RBI.
- Option C: FDI policy is formulated by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce.
- Option D: The supervision of cooperative and rural banks falls under the Department of Supervision and NABARD , respectively.
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