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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 RBI 2. The RBI lends funds to the commercial banks in times of need 3. The RBI advises commercial banks on monetary matters Select the correct answer using the code given below : 

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 RBI 2. The RBI lends funds to the commercial banks in times of need 3. The RBI advises commercial banks on monetary matters Select the correct answer using the code given below :  Correct Answer 1, 2 and 3 

The correct answer is 1, 2 and 3.

  • Reserve Bank of India is the Central Bank of India.

Key Points

  • It is also called a banker’s bank. It is responsible for issuing Indian currency and managing its flow in the market.
  • The commercial banks of the country have to retain some amount of deposit with the Reserve Bank of India which will be lent to them at the time of emergency.
  • If the commercial banks run short of money then RBI lends it in the form of a loan.
  • RBI also advises banks on money matters so that they function properly and maintains a good base in the market.

Related Questions

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 commercial banks in times of need. 3. The RBI advises commercial banks on monetary matters. Select the correct answer using the codes given below:
Which of the following statements are true in context of scheduled banks?
1. All banks which are included in the Second Schedule to the Reserve Bank of India Act, 1934 are Scheduled Banks.
2. These banks comprise Scheduled Commercial Banks and Scheduled Co-operative Banks.
3. Scheduled Commercial Banks in India are categorized into five different groups - SBI, Nationalised Banks, Regional Rural Banks, Foreign Banks and Other Indian Scheduled Commercial Banks in the private sector.
4. Scheduled Co-operative Banks consist of Scheduled State Co-operative Banks and Scheduled Urban Co-operative Banks.
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Examine the following statements: A. Repo rate is the rate at which the Reserve Bank of India borrows money from commercial banks within India. B. Reverse repo rate is the rate at which the RBI lends money to commercial banks in the event of any shortfall of funds. C. The RBI increased the repo-rate and reverse repo rate by 25 basis points to 6.5% and 6.25%, respectively on August 1, 2018 Choose the correct answer:
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Simplify the value of $$\frac{{{\text{0}}{\text{.9}} \times {\text{0}}{\text{.9}} \times {\text{0}}{\text{.9 + 0}}{\text{.2}} \times {\text{0}}{\text{.2}} \times {\text{0}}{\text{.2 + 0}}{\text{.3}} \times {\text{0}}{\text{.3}} \times {\text{0}}{\text{.3}} - {\text{3}} \times 0.9 \times {\text{0}}{\text{.2}} \times {\text{0}}{\text{.3}}}}{{{\text{0}}{\text{.9}} \times {\text{0}}{\text{.9 + 0}}{\text{.2}} \times {\text{0}}{\text{.2 + 0}}{\text{.3}} \times {\text{0}}{\text{.3}} - 0.9 \times {\text{0}}{\text{.2}} - {\text{0}}{\text{.2}} \times {\text{0}}{\text{.3}} - 0.3 \times 0.9}} = ?$$
Which of the following are a part of the aggregate monetary resources in an economy? 1. Currency held by the public 2. Net time deposits of commercial banks 3. Net demand deposits held by commercial banks Select the correct answer using the code given below.
Which among the following is NOT a correct statement?  1. The Reserve Bank of India worked as Central Bank of Burma till April 1947 2. The Reserve Bank of India worked as Central Bank of Pakistan till June 1948 3. The Reserve Bank of India worked as Central Bank of Bangladesh from January 1972 to December 1975 4. The Reserve Bank of India commenced its operations on April 1, 1935 
In the context of Indian economy, which of the following is/are the purpose/purposes of 'Statutory Reserve Requirements'? 1. To enable the Central Bank to control the amount of advances the banks can create 2. To make the people's deposits with banks safe and liquid 3. To prevent the commercial banks from making excessive profits 4. To force the banks to have sufficient vault cash to meet their day-to-day requirements Select the correct answer using the code given below.