Managing Public Debt: Role of Reserve Bank of India

Public debt refers to the money that the central and state governments borrow from various sources. Managing this debt is a crucial function for the financial stability of a country. This involves issuing government securities, managing their maturity, and ensuring timely repayment of interest and principal.

In India, the responsibility for managing the public debt of both the Central Government and the State Governments rests with a specific institution.

Let's consider the options provided:

• Bank of India: This is a commercial bank and does not manage government public debt.
• State Bank of India: This is a large public sector bank but is not the primary manager of the nation's public debt.
• Reserve Bank of India: The Reserve Bank of India (RBI) is the central bank of India. One of the key functions of the RBI, as mandated by law, is to act as the debt manager for the Central Government and the State Governments. It issues bonds and other securities on behalf of the government, manages the borrowing calendar, and handles interest and principal payments.
• Union Bank of India: This is another commercial bank and is not responsible for managing public debt.

Therefore, the institution that manages the public debt of Central and State Governments in India is the Reserve Bank of India (RBI).