Question

The Reserve Bank of India(RBI) acts as a banker's bank. This would imply which of the following?
$1$. Other banks retain their deposits with the RBI
$2$. RBI lends funds to the commercial banks in times of need
$3$. RBI advises the commercial banks on monetary matters
Select the correct answer using the codes given.

• A. $2$ and $3$
• B. $1$ and $2$
• C. $1$ and $3$
• D. $1,2$ and $3$

Answer 1

The correct option is D $1,2$ and $3$

The Reserve Bank of India acts as a banker's bank because other commercial banks retain their deposit with RBI and RBI lends deposits to commercial bank at the time of emergency need. Besides this RBI also systemized the monetary matters of economy like regulation of Bank rate, cash reserve ratio and open market operations.