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UPSC 2012: 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:
(a)2 and 3 only
(b)1 and 2 only
(c)1 and 3 only
(d)1, 2 and 3
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Not attemptedCorrect Answer: (b) 1 and 2 only
As the ‘bankers’ bank’, (1) scheduled banks keep part of their deposits with the RBI as Cash Reserve Ratio, (2) the RBI lends to them as lender-of-last-resort, and (3) issues circulars/ guidance on monetary and banking matters; therefore all three statements are correct. ([rbi.org.in](https://www.rbi.org.in/scripts/PublicationReportDetails.aspx?ID=702&utm_source=openai))
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Frequently Asked Questions
What is the correct answer to this UPSC 2012 Indian Economy question?▼
The correct answer is option (b): 1 and 2 only. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this Banking & Financial Sector question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2012, GS Paper 1, as Question 75. It falls under Indian Economy > Banking & Financial Sector.
What is the difficulty level of this UPSC question?▼
This question is rated "easy". It tests basic recall and most well-prepared aspirants should answer it correctly.
How many UPSC Prelims questions have been asked from Banking & Financial Sector?▼
UPSC has asked 48 questions from Banking & Financial Sector (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.