(i) To maintain an expert staff to study all questions on agricultural credit.
(ii) To provide expert advice to Central and State Government, State Co-operative Banks.
(iii) To finance the rural sector through eligible institutions and to co-ordinate them.

(i) It means multiplication of loans and advances.
(ii) The power of Commercial banks to create deposits through expanding their loans and advances is known as Credit Creation.

A Commercial bank is a financial institution that accepts deposits and advances loans and are profit motivated.

Objectives of Demonetisation :
(i) Removing Black Money from the country.
(ii) Stopping of corruption.
(iii) Stopping terror funds.
(iv) Curbing fake note

The IFCI does the following functions
(i) Providing long-term loans in rupees and foreign currencies.
(ii) Underwriting of equity, preference and debenture issues.
(iii) Subscribing to equity, preference and debenture issues.
(iv) Guaranteeing the deferred payments for machinery imported from abroad or purchased in India
(v) Guaranteeing of loans raised in foreign currency from foreign financial institutions.

(i) A non-banking financial institution or company is a financial institution that does not have a full banking license or is not supervised by the central bank.
(ii) They receive deposits and give loans.
(iii) They mobilize people's savings and use the funds to finance expenditure on investment activities.
(iv) The undertake borrowing and lending in the money and capital markets.
(v) They are classified into Stock Exchange and Other Financial institutions.
(vi) Under other financial institutions come Finance Companies, Finance Corporations, Chit Funds, Building Societies, Issue Houses, Investment Trusts, Unit Trusts and Insurance Companies.

Introduction
(i) Monetary Policy is the macroeconomic policy laid down by the Central Bank towards the management of money, supply and interest rate. It is associated with Milton Friedman
1) Neutrality of Money
(i) Wicksteed, Hayek and Robertson are the chief exponents of neutral money.
(ii) They say that the monetary authority should aim at neutrality of money in the economy.
(iii) Monetary changes cause distortion and disturbances in the proper functioning of the economic system of the leading to all economic fluctuations.
2) Exchange Rate Stability
(i) It is a traditional objective from the Gold Standard period
(ii) When there was disequilibrium in the balance of payment, it was automatically corrected by movements.
(iii) It was popularly known as "Expand Currency and Credit when gold is coming in; Contract currency and credit when gold is going out."
(iv) If there is instability in the exchange rates, it would result in outflow or inflow of gold resulting in unfavorable balance of payments.
3) Price Stability
(i) Crustave Cassel and Keynes suggested price stabilization as a main objective of monetary policy.
(ii) Stable Price creates public confidence, promotes business activity and ensures equitable distribution of income and wealth leading to prosperity and welfare
(iii) Price stability does not mean price rigidity or price stagnation.
(iv) A mild increase in the price level provides a tonic for economic growth.
4) Full Employment
(i) Unemployment was socially dangerous, economically wasteful and morally deplorable.
(ii) Both Keynes' General Theory of Employment, Interest and Money in 1936, the objective of full employment became very important
5) Economic Growth
(i) Economic growth is the process whereby the real per capita income of a country increases
(ii) There is increase in the total physical or real output
(iii) Monetary policy should promote sustained and continuous economic growth by maintaining equilibrium between the total demand for money and total production capacity for creating increase in saving and investment.
(iv) Flexible monetary policy is the best solution.
6) Equilibrium in the Balance of Payments (BoP)
(i) World trade was faster than world liquidity.
(ii) Increasing deficit in BoP reduces the ability of an economy to achieve other objectives.
(iii) Many less developed countries reduce their imports which adversely affects development activities, so monetary authority should make efforts to bring equilibrium in the BoP.

Introduction
(i) Commercial banks are institutions that conduct business with profit motive by accepting public deposits and lending loans.
Capital Formation
(i) Bank mobilize the small savings of the people scattered over a wide area through their network of branches and make it available for productive purposes.
(ii) Attractive schemes of the banks induce the people to save their money
Creation of Credit
(i) Credit creation leads to increased production, employment, sales and prices and thereby there is faster economic development.
Channelizing Funds towards Productive Investment
(i) Pooled savings is allocated to various sectors and productivity increases.
Encouraging Right Industries
(i) Banks give loan to right type of persons.
(ii) Banks grant loans and advances to manufacturers whose products are in great demand.
(iii) Manufacturers introduce new methods of production and assist in raising the national income of the country.
Banks Monetize Debt
(i) Banks transform the loan to be repaid after a certain period into cash, which can be immediately used for business activity.
(ii) Manufacturers and wholesale traders cannot increase their sales without selling goods on credit basis.
(iii) But credit sales may lead to locking up of capital.
(iv) So production is reduced.
(v) As banks are lending money by discounting bills of exchange, business concerns are able to carry out economic activities without gap.
Finance to Government
(i) Government needs finance for promoting industries.
(ii) Banks provide long-term credit to Government by investing their funds in Government securities and short-term finance by purchasing Treasury Bills.
(iii) RBI has given Rs.68,000 crores to the government of India in the year 2018-19.
Employment Generation
(i) Bank's branches are opened frequently and so new employment opportunities are created.
Banks Promote Entrepreneurship
(i) Banks induce new entrepreneurs to take up the well-formulated projects and provision of counseling services like technical and managerial guidance.
(ii) Conclusions Banks provide 100 % credit for worthwhile projects, which is also technically feasible and economically viable.
(iii) Thus commercial banks help for the development of entrepreneurship in the country.