Answer: Option D
Answer: (d)
The Reserve Bank of India (RBI) is known as the Lender of Last Resort. This is because when a commercial bank faces a financial crisis and fails to obtain funds from other sources, then the central bank provides them with financial assistance in the form of credit.
This role of the central bank saves the commercial bank from bankruptcy. Thus, the RBI plays the role of guarantor for commercial banks and maintains a sound banking system in the economy.