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Question : ___________ is known as lender of last resort

Option 1: RBI

Option 2: Ministry of Finance

Option 3: Department of Revenue

 

Option 4: Central Bank of India


Team Careers360 16th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: RBI


Solution : The correct answer is (a). RBI

The Reserve Bank of India (RBI) is commonly known as the lender of last resort. As the central bank of India, the RBI plays a crucial role in maintaining stability and confidence in the financial system. One of the key functions of the RBI is to act as a lender of last resort to banks and other financial institutions.

By providing liquidity to banks, the RBI helps ensure that they can meet their payment obligations, maintain confidence, and avoid panic or contagion effects. The lender of last resort function is an important tool in managing financial crises and ensuring the smooth functioning of the banking sector.

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