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Question
______ is the apex institution of the country's monetary and banking structure where as ______ is one of the organs of the money market.
Options
Commercial Bank, central bank
Central Bank, commercial bank
Specialised Bank, central bank
Commercial bank, specialised bank
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Solution
Central Bank is the apex institution of the country's monetary and banking structure where as commercial bank is one of the organs of the money market.
Explanation:
The Central Bank (such as the Reserve Bank of India) serves as the highest monetary authority because it has the authority to formulate monetary policy, issue currency, and regulate the whole financial system. A commercial bank, on the other hand, acts as one of the money market's operating organs by accepting short-term deposits and providing commercial loans directly to the general public.
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