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Foreign Exchange

RBI acts as t...

Question

RBI acts as the banker to the central government and commercial banks act as banker to the state governments.

A

True

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B

False

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Solution

The correct option is B False
RBI acts as the banker to the central government as well as state governments.

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Similar questions

Q. The RBI acts as a banker to the Government of India but not to the banks in India.

Q. List two ways in which a Central Bank acts as a 'Banker to the Government'.

Q. Discuss the functions of the central bank as a 'Banker of Banks' and 'Banker to the Government'.

Q. Give reasons or explain.

1. Clearing house system economises the use of cash.
2. Central Bank acts as a lender of the last resort.
3. The CRR affects the lending capacity of the banks.
4. As a banker to the government, the Central Bank transfers government funds.
5. A Central Bank may take 'Direct Action' against the defaulting commercial banks.

Q. Explain the function of Central Bank as a "Banker to the Government".

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