Question

Qus. 18. How does the Reserve Bank of India (RBI) supervise the functioning of bankes? Is it
necessary?​

Answer 1

The RBI holds a part of the cash reserves of the banks, lend them funds for short period and provides them with centralized cleaning and cheap and quick remittance facilities. The RBI functions as the lender of the last resort. This is how the bank supervises the functions and it is really necessary.