The correct option is 2 and 3 only.
Explanation
The Reserve Bank of India (RBI) is the central banking institution of India. Its primary mandates include the issuance of currency, regulation of the banking system, and management of monetary policy. It operates as a banker to the government and banks, distinct from commercial banks that deal with the public.
Statement 1 is Incorrect: The RBI has the sole right to issue currency notes in India (except for one-rupee notes and coins, which are issued by the Ministry of Finance). It performs this function on behalf of the Central Government, not on behalf of private banks.
Statement 2 is Correct: The RBI supervises the functioning of formal sources of loans, such as commercial banks and cooperative banks. This supervision involves monitoring the maintenance of cash balances (Cash Reserve Ratio), ensuring compliance with Priority Sector Lending (PSL) targets, and regulating interest rates on certain categories of loans to ensure financial stability.
Statement 3 is Correct: The RBI does not directly lend money to individuals, businesses, or farmers. Instead, it provides refinance facilities to specialized institutions like NABARD (National Bank for Agriculture and Rural Development), which then support the banks and cooperatives that extend direct credit to farmers.
Key Takeaway: The RBI acts as a regulator and a "Banker's Bank"; it does not engage in retail banking or direct lending to the public or specific sectors like agriculture.