Q75.
The Reserve Bank of India (RBI) acts as a bankers' bank. This would imply which of the following? 1. Other banks retain their deposits with the RBI. 2. The RBI lends funds to the commercial banks in times of need. 3. The RBI advises the commercial banks on monetary matters. Select the correct answer using the codes given below:
Answer
B
Explanation
RBI as a bankers' bank means: (1) Commercial banks maintain deposits (Cash Reserve Ratio - CRR) with the RBI — correct. (2) RBI lends to commercial banks through Repo Rate, Bank Rate, etc. in times of need — correct. Statement 3 is incorrect in this specific context — 'advising commercial banks on monetary matters' is not what 'bankers' bank' implies. That function falls under RBI's role as a monetary authority/regulator, not specifically its bankers' bank function.