Maharashtra State BoardHSC Arts 12th Board Exam
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Define Or Explain the Concept of Lender of the Last Resort . - Economics

Define or explain the concept of Lender of the last resort .

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Solution

The Central Bank acts as the lender of last resort for the commercial banks and the government. When a commercial bank faces financial crisis and fails to obtain funds from other sources, the Central Bank plays the vital role of ‘lender of last resort’ and provides them with financial assistance in the form of credit.

Concept: Definition - Central Bank
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