1.

Why is the Central Bank considered to be the lender of the last resort?

Answer»

Lender of the Last Resort:

The Central Bank acts as the lender of the last resort. When commercial banks fail to meet their financial requirements from other sources, they can approach the Central Bank which provides them with loan and advances as lender of the last resort.

The Central Bank provides this facility to protect the interest of the depositors and to prevent possible failure of the bank.



Discussion

No Comment Found

Related InterviewSolutions