Assertion (A): Reserve Bank of India (RBI) acts as the clearing house of Commercial Banks
Assertion (A): Reserve Bank of India (RBI) acts as the clearing house of Commercial Banks.
Reason (R): As RBI holds the cash reserves of all the Commercial Banks, RBI can easily settle claims of various commercial banks against each other, by making debit and credit entries in their accounts.
Alternatives:
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False
(d) Assertion (A) is False but Reason (R) is True
Anurag Pathak Changed status to publish January 5, 2024
Ans – (a)
Explanation:-
Clearing House:- As the central bank holds the cash reserves of all the commercial banks, it becomes easier and more convenient for it to act as their clearing house. All commercial banks have their accounts with the central bank. Therefore, the central bank can easily settle claims of various commercial banks against each other, by making debit and credit entries in their accounts.
Anurag Pathak Changed status to publish January 5, 2024
