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Question
______ is a Banker’s Bank.
Options
Commercial Bank
Agricultural Bank
Exchange Bank
Central Bank
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Solution
Central Bank is a Banker’s Bank.
Explanation:
The Central Bank (such as the Reserve Bank of India) serves as a “Banker’s Bank” by holding a percentage of commercial banks’ cash reserves and overseeing their centralized clearing accounts. It has a unique regulatory relationship with commercial banks, offering lending facilities and serving as their mandated lender of last resort during financial crises.
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