Which of the following are the sources of income for the Reserve Bank of India? I. Buying and selling Government bonds. II. Buying and selling foreign currency. III. Pension fund management. IV. Lending to private companies. V. Printing and distributing currency notes. Select the correct answer using the code given below:

I. Buying and selling Government bonds — Correct. RBI earns interest/capital gains from government securities and related market operations.

II. Buying and selling foreign currency — Correct. RBI earns from foreign exchange operations and from investing foreign currency assets.

III. Pension fund management — Incorrect. This is not a standard source of RBI income in UPSC’s framing.

IV. Lending to private companies — Incorrect. RBI does not normally lend to private companies as a regular income-earning function.

V. Printing and distributing currency notes — Correct in UPSC key’s framing. RBI gets seigniorage/issue income from currency issuance: it issues notes against interest-earning assets, while the cost of printing is lower than the face value. Hence currency issue is treated as a source of income.

Therefore, I, II and V are correct.