Q. The Reserve Bank of India works as a lender of the last resort (LOLR). Which among the following is the correct statement in this context?
Answer: RBI meets all the reasonable demands of the commercial banks in times of difficulties
Notes: The banks can borrow from the RBI on the basis of eligible securities or any other arrangement and at the time of need or crisis, they approach RBI for financial help. Thus RBI works as Lender of the Last Resort (LORL) for banks.

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