One of the important function of the Central bank is to provide funds to commercial banks at the time of emergency. Identify the instrument through which RBI can perform this function.
One of the important function of the Central bank is to provide funds to commercial banks at the time of emergency. Identify the instrument through which RBI can perform this function.
Solution
✅ Correct Option: 2
When commercial banks face an emergency shortage of funds and no other source is available, the RBI provides them funds in its capacity as the lender of last resort.
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