Central govt lends money to state government on which basis
Answers
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The RBI is the banker to last resort. It is also called as the Banker to the Government.
No it does not print cash to give loan to govt. For that the Gold is require to be pledged.
No the CRR is not provided to Govt.
The RBI on behalf of the Govt participates in Money market. The money market instruments such as Treasury bill, Reverse REPO and lots of other SLR instruments are brought into market for Bank's and other financial institutions to buy them for a specific period of time. The Banks and Financial institutions park their surplus fund in these instruments. RBI pays the interest on these instrument from the income that it has earned during the period from various sources or from Govt expenditure.
RBI also invest in foreign currency and other sovereign Govt bonds of other countries as investment. The interest income is transfered to the Govt account.
From time to time the RBI also transfer the surplus fund to Govt account.
No it does not print cash to give loan to govt. For that the Gold is require to be pledged.
No it does not print cash to give loan to govt. For that the Gold is require to be pledged.No the CRR is not provided to Govt.
No it does not print cash to give loan to govt. For that the Gold is require to be pledged.No the CRR is not provided to Govt.The RBI on behalf of the Govt participates in Money market. The money market instruments such as Treasury bill, Reverse REPO and lots of other SLR instruments are brought into market for Bank's and other financial institutions to buy them for a specific period of time. The Banks and Financial institutions park their surplus fund in these instruments. RBI pays the interest on these instrument from the income that it has earned during the period from various sources or from Govt expenditure.
No it does not print cash to give loan to govt. For that the Gold is require to be pledged.No the CRR is not provided to Govt.The RBI on behalf of the Govt participates in Money market. The money market instruments such as Treasury bill, Reverse REPO and lots of other SLR instruments are brought into market for Bank's and other financial institutions to buy them for a specific period of time. The Banks and Financial institutions park their surplus fund in these instruments. RBI pays the interest on these instrument from the income that it has earned during the period from various sources or from Govt expenditure.RBI also invest in foreign currency and other sovereign Govt bonds of other countries as investment. The interest income is transfered to the Govt account.
No it does not print cash to give loan to govt. For that the Gold is require to be pledged.No the CRR is not provided to Govt.The RBI on behalf of the Govt participates in Money market. The money market instruments such as Treasury bill, Reverse REPO and lots of other SLR instruments are brought into market for Bank's and other financial institutions to buy them for a specific period of time. The Banks and Financial institutions park their surplus fund in these instruments. RBI pays the interest on these instrument from the income that it has earned during the period from various sources or from Govt expenditure.RBI also invest in foreign currency and other sovereign Govt bonds of other countries as investment. The interest income is transfered to the Govt account.From time to time the RBI also transfer the surplus fund to Govt account.