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प्रश्न
Central bank is the lender of the last resort. Explain.
The Central Bank is the apex monetary institution of the country. Explain its role of a lender of the last resort.
उत्तर
- As a banker to the banks, the central bank acts as the lender of the last resort. In other words, in case the commercial banks fail to meet their financial requirements from other sources, they can, as a last resort, approach the central bank for loans and advances.
- Thus, it saves banks from possible failure and banking system from a possible breakdown.
संबंधित प्रश्न
Which of the following is a selective/qualitative method of credit control.
The rate of which commercial banks borrow from the Central Bank is the:
Bank rate is the rate at which:
Briefly explain the following credit control methods adopted by the Central Bank.
Moral persuasion
Explain the following function of the central bank of a country.
Fixation of margin requirement on secured loans.
Who controls the credit supply in an economy?
Identify the following Credit Control measures undertaken by the Central Bank during inflation.
The Central Bank increases the rate at which it lends to the Commercial Bank.
What are quantitative methods of credit control?
What is meant by Legal Reserve Ratio?
Give an example of margin requirements.
