Attempt this previous-year question. The correct option stays hidden until you choose.
In India, the central bank’s function as the ‘lender of last resort’ usually refers to which of the following?
1. Lending to trade and industry bodies when they fail to borrow from other sources.
2. Providing liquidity to the banks having a temporary crisis.
3. Lending to governments to finance budgetary deficits.
Select the correct answer using the code given below:
Pick an option to check yourself.
• Correct Answer: B
• RBI lends emergency liquidity to solvent banks facing temporary crises, preventing bank runs and systemic instability.
• Lending to trade bodies or government deficit financing falls under other RBI functions, not lender of last resort.
Attempt Prelims MCQs or open Mains questions by paper — then continue the same bank inside the app with visual decks.
GyanGram