The Reserve Bank of India (RBI) acts as a bankers' bank

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:

  1. 1 and 3 only
  2. 2 and 3 only
  3. 1, 2 and 3
  4. 1 and 2 only

Answer

The Reserve Bank of India (RBI) is India's Central Banking Institution, which controls the Monetary Policy of the Indian Rupee.

The correct option is C.