Which of the following is also known as the 'lender of the last resort'?

Question

Question

This question was previously asked in

SSC CGL 2023 Tier-I Official Paper (Held On: 21 Jul 2023 Shift 3)

Answer 1

The correct answer is RBI.

Key Points

The correct answer is option 3, RBI, which is also known as the 'lender of the last resort'.
The lender of the last resort is a term used to describe an institution that provides emergency funds to other financial institutions when they are facing a shortage of liquidity.
This is usually done to prevent a financial crisis or a bank run.
In India, the Reserve Bank of India (RBI) is the lender of the last resort.
It has the authority to lend money to banks and other financial institutions in case of a crisis.
The RBI also acts as the regulator of the banking system in India. It sets policies and guidelines for banks to follow, and monitors their performance to ensure that they are operating in a safe and sound manner.

Additional Information

SEBI(Securities Exchange Board of India) is the regulator of the securities market in India. It does not have the authority to lend money to financial institutions.
RRBs (Regional Rural Banks) are a type of bank that focuses on providing banking services to the rural population. They do not have the authority to act as the lender of the last resort.
SBI (State Bank of India) is a public sector bank in India. While it is one of the largest banks in the country, it does not have the authority to act as the lender of the last resort.