Multiple choice

RBI undertakes govt. business. Which among the following statements is not correct in this connection?

  1. RBI cannot refuse to transact banking business of Central Govt.

  2. RBI undertakes banking business of State Govt. as a result of agreement with respective State Govt.

  3. RBI provides ways and means advance to Central Govt. only and not the State Govt.

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy by which it provides help to the States to tide over temporary mismatches in the cash flow of their receipts and payments.

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