BANKING AFFAIRS

Detailed explanation-1: -Which among the following is the Biggest Borrower in India? a)Indian Governmentb)Reserve Bank of Indiac)Indian Railwaysd)State GovernmentsCorrect answer is option ‘A’. Can you explain this answer? for Teaching 2023 is part of Teaching preparation.

Detailed explanation-2: -The Government of India, in consultation with the Reserve Bank of India, has finalized its borrowing programme for the second half (H2) of FY 2022-23. Out of the Gross Market borrowing of ₹14.31 lakh crore projected for FY 2022-23, the Government of India has decided to borrow ₹14.21 lakh crore during the FY 2022-23.

Detailed explanation-3: -RBI does not invest in State Government loans either in primary issues or in the secondary market.

Detailed explanation-4: -Currently, the Reserve Bank acts as banker to all the State Governments in India (including Union Territories of Puducherry and Jammu and Kashmir), except Sikkim.

Detailed explanation-5: -Banker’s to government RBI acts as a bank to both the central as well as the state government. It provides them the short-term loan whenever necessary. The government deposit accounts are also maintained by the RBI. On behalf of the government, it collects the receipts of the funds and makes the payment.