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Question
Yes Bank was facing financial crisis recently due to the crisis of non-performing assets. It approached the RBI for help. What role can RBI play in such a situation?
Options
Acting as regulator of the commercial bank
Acting as banker to the commercial banks
Acting as advisor to the commercial banks
Acting as lender of the last resort
MCQ
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Solution
Acting as lender of the last resort
Explanation:
When a commercial bank faces a severe shortage of funds after exhausting its own resources, the RBI can provide financial assistance as the lender of last resort.
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