Question

Choose the correct option.

Statement I: The RBI carries out the general banking activities of both the central government and for almost all the state governments in India.
Statement II: The Government of India can take loans from the RBI.

• A. Both statements are true.
• B. Both statements are false.
• C. Statement I is true, but statement II is false.
• D. Statement I is false, but statement II is true.

Answer 1

The correct option is A Both statements are true.

The Reserve Bank of India is also the banker to the government. It acts as a banker to the central government and to most of India's state governments. It does payments on behalf of the governments and helps them with loans when needed.