(i) Reserve Bank keeps a close watch on the external value of its currency and undertakes exchange management control. All the foreign currency received by the citizens has to be deposited with the reserve bank and if citizens want to make payment in foreign currency, they have to apply to reserve bank. It also keeps gold and billion reserves. 

(ii) Promotional and developmental functions: The RBI has been a promoter since its inception. 

Various promotional and developmental functions of RBI are:

• By encouraging commercial banks to expand their branches in semi-urban and rural areas, the reserve bank helps: To reduce the dependence of the people in these areas on the defective unorganized sector of indigenous bankers and money lenders. To develop the banking habits of the people. 

• By establishing the Deposit Insurance Corporations. 

• Through the Institutions like Unit Trust of India, the Reserve Bank helps to mobilize saving in the country. 

• Since its inception, Reserve Bank is making efforts to promote institutional agricultural credit by developing cooperative credit institutions. 

• It also helps to promote the process of industrialization in the country by setting up specialized institutions for industrial finance. 

• It also takes measures for developing the bill market in the country.