The Reserve Bank of India (RBI) acts as a bankers’ bank. This would imply which of the following?
1.Other bank retains their deposits with the RBI.
2.The RBI lends funds to the commercial banks in times of need.
3.The RBI advises the commercial banks on monetary matters.
Select the correct answer using the codes given below:
2 and 3 only
Incorrect Answer1 and 2 only
Incorrect Answer1 and 3 only
Incorrect Answer1, 2 and 3
Correct AnswerExplanation:
1, 2 and 3
"The Reserve Bank of India (RBI) acts as a bankers’ bank" implies:
Other banks retain their deposits with the RBI: The RBI holds deposits of other banks, and they maintain accounts with the RBI.
The RBI lends funds to the commercial banks in times of need: The RBI provides financial assistance to commercial banks in the form of loans and advances, especially during liquidity crises.
The RBI advises the commercial banks on monetary matters: The RBI acts as a central banking authority and provides guidance and advice to commercial banks on various monetary and financial matters.
So, all three options are correct.
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By: Kamal Kashyap