The Correct Answer is Option B: The RBI is responsible for the overall monetary policy in India.

Explanation:

Monetary Policy:
Monetary policy refers to the measures taken by the central bank of a country (in this case, the Reserve Bank of India) to control the money supply and interest rates in order to achieve macroeconomic objectives such as controlling inflation, promoting economic growth, and maintaining financial stability.

The Role of RBI:
The Reserve Bank of India (RBI) is the central bank of India and is responsible for the formulation and implementation of monetary policy in the country. It is an apex institution that regulates and supervises the financial system and performs various functions to maintain monetary stability.

Key Functions of RBI:
1. Formulation and Implementation of Monetary Policy: The RBI formulates and implements monetary policy in India. It uses various tools such as open market operations, reserve requirements, and repo rate to control the money supply and interest rates in the economy.

2. Issue and Circulation of Currency: The RBI is responsible for the issue and circulation of currency notes and coins in the country. It ensures an adequate supply of currency to meet the needs of the economy.

3. Banker to the Government: The RBI acts as a banker to the central and state governments. It manages their accounts, facilitates government borrowing, and conducts the sale and purchase of government securities.

4. Regulator and Supervisor of the Financial System: The RBI regulates and supervises banks, non-banking financial institutions, and other financial intermediaries. It sets guidelines and norms for their functioning, monitors their performance, and takes corrective measures when necessary.

5. Foreign Exchange Management: The RBI manages the foreign exchange reserves of the country and formulates policies to regulate foreign exchange transactions. It intervenes in the forex market to maintain stability in the exchange rate.

6. Developmental Role: The RBI plays a developmental role by promoting financial inclusion, supporting initiatives for financial literacy, and providing credit facilities to priority sectors such as agriculture, small-scale industries, and exports.

Conclusion:
The Reserve Bank of India (RBI) is responsible for the overall monetary policy in India. It formulates and implements measures to control the money supply and interest rates in order to achieve macroeconomic objectives. It also performs various other functions to maintain financial stability and regulate the financial system in the country.

A