Advertisements
Advertisements
Question
Mention two ways in which the Reserve Bank of India assists the commercial banks.
Advertisements
Solution
The Reserve Bank of India (RBI) assists commercial banks in two main ways:
- Lender of Last Resort: During times of financial difficulties, the RBI provides funds to commercial banks to ensure liquidity and stability in the banking system.
- Monetary Policy Regulation: The RBI manages interest rates and the money supply, which have a direct impact on commercial bank operations and help to ensure economic stability.
APPEARS IN
RELATED QUESTIONS
Which of the following is not a function of the Central Bank?
Explain the functions of the RBI with respect to the following:
- Custodian of foreign exchange reserves.
- Monopoly of note issue.
- Clearing house facility.
- Banker and fiscal agent to the government.
- In the realm of economic development, how does the role of entrepreneurs impact the overall growth and stability of a nation.
Central bank is the ______ of the country's foreign currency reserves.
The ______ is the central bank of our country which has the authority to print currency notes.
Give two major functions of the central bank of our country.
______ is the main function of central bank.
Identify the function of RBI as indicated by the following image.
Give two reasons why the central banks enjoy monopoly of note issue.
Explain the following function of the central bank of a country.
Developmental functions.
