In India, the central bank’s function as the “lender of last resort” usually refers to which of the following? 1. Lending to trade and industry bodies when they fail to borrow from other sources 2. Providing liquidity to the banks having a temporary crisis 3. Lending to governments to finance budgetary deficits Select the correct answer using the code given below.
Question:
In India, the central bank’s function as the “lender of last resort” usually refers to which of the following? 1. Lending to trade and industry bodies when they fail to borrow from other sources 2. Providing liquidity to the banks having a temporary crisis 3. Lending to governments to finance budgetary deficits Select the correct answer using the code given below.
In India, the central bank’s function as the “lender of last resort” usually refers to which of the following? 1. Lending to trade and industry bodies when they fail to borrow from other sources 2. Providing liquidity to the banks having a temporary crisis 3. Lending to governments to finance budgetary deficits Select the correct answer using the code given below.
Options
Answer: 2 only
Explanation:
The Reserve Bank of India acts as the lender of last resort by providing liquidity to banks facing temporary financial stress to maintain stability in the banking system.
Explanation:
The Reserve Bank of India acts as the lender of last resort by providing liquidity to banks facing temporary financial stress to maintain stability in the banking system.
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