Manish said that the Central Bank can borrow money from the Commercial Bank. Nisha said that the Commercial bank can borrow from the Central Bank. Vijay said that both the Central Government and all the State Governments can borrow money from the Central Bank. Who is correct?
(d) All of them
Ans – (d)
The central bank can borrow money from the commercial bank in need.
The commercial bank can also money from the central bank as the central bank is the last resort.
The central government and all state governments can also borrow from the central bank as it is the bank of the government.