Question

The RBI Act provides that the Reserve Bank shall not engage in trade or have a direct interest in any commercial undertaking except as permitted. This is a restriction under which section?

Q: Answer-The RBI Act provides that the Reserve Bank shall not engage in trade or have a direct interest in an...

Section 19 of the Reserve Bank of India Act sets out the business which the Reserve Bank may not transact. The RBI is prohibited from engaging in trade, purchasing its own shares or the shares of any other bank or company except as permitted, advancing money on the security of shares, and other specified activities. These prohibitions keep the central bank focused on its core monetary and regulatory functions and free from commercial conflicts of interest.