Advertisements
Advertisements
Question
Define or explain the concept of Lender of the last resort .
Advertisements
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.
APPEARS IN
RELATED QUESTIONS
The RBI was nationalised in the year 1935.
Meaning and Definition of Central bank?
The central bank can increase availability of credit by: (Choose the correct alternative)
(a) Raising repo rate
(b) Raising reverse repo rate
(c) Buying government securities
(d) Selling government securities
Explain the role of the Reserve Bank of India as the “lender of last resort”.
What is a central bank?
Fill in the blank using proper alternative given in the bracket:
......................... is the apex body of the monetary and banking system of the nation’s economy.
Give reason or explain the following.
Cash reserve ratio (CRR) affects the lending capacity of banks.
Match the following Group ‘A’ with Group ‘B’
| Group A | Group B |
| (a) Electricity | (1) Inelastic demand |
| (b) Complementary goods | (2) Share brokers |
| (c) Pension | (3) Elastic demand |
| (d) D - mat account | (4) Composite demand |
| (e) Central Bank | 5) Transfer income |
| (6) Primary function of Commercial Banks | |
| (7) ATM facility | |
|
(8) Apex banking institution
|
Give reason or explain the following statement:
Central Bank acts as a lender of the last resort.
Explain, with reason, whether you Agree or Disagree with the following statement :
Central Bank is a profit making institution ?
State whether the following statements are True or False:
Central Bank acts as a lender of the last resort.
Rewrite the following sentences by using proper substitute given in the bracket:
__________ has monopoly to issue the currency notes.
Fill in the blanks with appropriate alternatives given in the bracket.
To increase credit creation Central Bank __________ the debentures.
Fill in the blank with appropriate alternatives given below
Reserve Bank of India was established in _____________.
Define or Explain the following concept.
Prof. Samuelson's definition of Central Bank
Give reason or explain.
As a banker to the government, the Central Bank transfers government funds.
Give reason or explain.
A Central Bank may take 'Direct Action' against the defaulting commercial banks.
Write short note on:
Definition of a Central Bank
State with reason whether you agree or disagree with the following statement.
Central Bank is a profit-making institution.
Fill in the blank using appropriate alternatives given below
The e - banking facility is provided through _________
In order to encourage investment in the economy, the Central Bank may ______.
Choose the Correct Answer.
The Central bank of India is ______
Choose the Correct Answer.
Which of the following is not a function of a central bank?
Briefly explain about Central Bank.
Central Bank is an ______.
Which statement best describes the central bank?
The Reserve Bank of India began its operations on ______.
As “bank of issue”, the central bank mainly ______.
Why is the central bank called the “lender of last resort”?
In a developing economy like India, which of the following is an important developmental role of the central bank?
