The Reserve Bank of India (RBI) acts as a bankers’ bank. This would imply which of the following? 1. Other banks retain 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 :

QUESTION

Easy

Economy

Prelims 2012

The Reserve Bank of India (RBI) acts as a bankers’ bank. This would imply which of the following?

Select the correct answer using the codes given below :

Select an option to attempt

Explanation

Commercial banks keep a portion of their reserves with the RBI for various reasons, including regulatory requirements and secure storage.

The RBI acts as a lender of last resort, providing liquidity to banks facing temporary shortages.

The RBI does have a role in advising the commercial banks on monetary matters, by giving out advisories time to time.

Therefore, all statements are correct.

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