Question

"Reserve Bank of India acts as a last resort to all banks
in their financial matters." Substantiate the statement on
the basis of the functions of the Reserve Bank of India.​

Answer 1

1- They make sure that banks lend money to not only profit-making buisnessman but to poor people too.

2- They make sure that banks keep a minimum cash balance out of the total deposits ( so to provide loans)

3- RBI supervises the functioning of formal sources of loans.

Answer 2

"Reserve Bank of India acts as a last resort to all bank in their financial matters."

1. RBI provides loan against eligible securities, to the commercial banks.
2. RBI also provides financial assistance to the commercial banks by rediscounting bills of exchange.
3. When the commercial banks do not get loan facility from any resource, RBI saves them.