ECONOMICS
FEDERAL RESERVE
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
Reserve banks assist the treasury in ____
|
|
sending trucks of cash to smaller banks
|
|
|
issuing and redeeming securities
|
|
|
sending trucks of money to banks to prevent failure
|
|
|
stopping the domino effect by giving customers of failing banks a bank to use
|
Explanation:
Detailed explanation-1: -Government securities in the form of GPN, bearer bond, stock and BLA are issued by RBI, while the Agency Banks are presently eligible to issue Relief/Savings Bonds in the form of BLA only.
Detailed explanation-2: -T-bills are issued at a discount and are redeemed at par. While 14-day and 91-day T-bills are auctioned every week on Fridays, 182-day and 364-day T-bills are auctioned every alternate week on Wednesdays. The Reserve Bank of India issues a calendar of T-bill auctions.
Detailed explanation-3: -This means that RRR is the Repurchase Agreement where RBI pledges securities to banks to borrow money. RBI also repurchases them.
There is 1 question to complete.