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Start learning 50% faster. Sign in nowSection 45ZB of the amended RBI Act, 1934, also provides for an empowered six-member Monetary Policy Committee (MPC) to be constituted by the Central Government by notification in the Official Gazette Section 7 of the RBI Act empowers the central government to issue directions in public interest from time to time to the bank in consultation with RBI Governor. Section 17 deals with the functioning of RBI. The RBI can accept deposits from the central and state governments without interest. It can purchase and discount bills of exchange from commercial banks. It can purchase foreign exchange from banks and sell it to them. Section 31 provides that in India RBI and central government only can issue and accept promissory notes that are due on request. Section 42(1) provides that every scheduled bank needs to hold an average daily balance with the RBI.
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