Question

Lender of last resorts means _________.

• A. SBI
• B. Central Bank of the Country
• C. Ministry of Finance
• D. Department of Income-tax.

Answer 1

The correct option is B Central Bank of the Country

Central bank is an apex bank that regulates and controls the entire banking system of a country. The central bank lends money to government and the commercial banks when they are facing liquidity crunch or any type of insolvency. The central bank are the last resort to provide loans to the government and commercial banks against any type of collateral. Therefore. lender of last resort means central bank of the country.