Multiple choice

Which of the following statement is true?

  1. The currency notes issued by RBI are legal tender throughout the world

  2. The treasury bills are sold by the RBI for raising its working capital

  3. All commercial banks, including those owned by Government, need a licence from the RBI to do banking business

  4. The RBI is a banker to both central and state governments
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Reserve Bank of India acts as banker to both the Central Government and State Governments, managing their banking operations, payments, and public debt. Currency notes issued by RBI are legal tender only in India, not worldwide. Treasury bills are sold by the government for fiscal management, not for RBI's working capital. While commercial banks do need RBI licenses, option D is the most direct and comprehensive true statement.

Keep practicing — related questions