A sudden mass withdrawal by depositors creates a liquidity crisis for commercial banks. In such situations, RBI provides emergency funds to commercial banks in its role as the lender of last resort.
CUET UG 2023 — Economics Macro
If all the depositors, one day come to withdraw all the cash, what would be role played by RBI?
Verified 13 Jul 2026.
Maintaining Foreign Exchange Reserves
Lender of last resort
Maintaining cash reserves
Currency issue
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