Multiple choice

RBI undertakes banking business for Central Govt. u/s ________ of RBI Act. For State Govt, the banking business is done by RBI u/s 21A of _________ based on agreement.

  1. 20, RBI Act

  2. 21A, RBI Act

  3. 20, BR Act

  4. 21A, BR Act
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A Correct answer
Explanation

Section 20 in The Reserve Bank of India Act, 1934: Obligation of the Bank to transact Government business — The Bank shall undertake to accept monies for account of the Central Government and to make payments up to the amount standing to the credit of 4 [its account], and to carry out 5, remittance and other banking operations, including the management of the public debt. Section 21A of RBI act talks about bank to transact Government business of States on agreement.

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