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Like individual… (Class 12 Economics SQP 2026-27, Q13A)

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EconomicsCBSE Class 12 · Sample paper, session 2026-27 · 4 marks · Short answer

CBSE Class 12 Economics sample paper 2026-27: question 13(A)

From the official CBSE sample question paper for 2026-27, section A, question 13(A), for 4 marks. Try it first; the hints and our step-by-step solution are below.

Q13(A) · 4 marks · Short answerCompetency-basedMoney and Banking

Like individual consumers, businesses and organisation of all kinds, banks need their own mechanism to transfer funds and settle inter-bank transactions, such as borrowing from and lending to other banks and customer transactions.
Source: https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/RWF15012018_FCD40172EE58946BAA647A765DC942BD5.PDF
Identify and explain the function fulfilled by the Reserve Bank of India in the aforesaid statement.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2026-27.

Hints

Open one hint at a time and try again before the next.

Hint 1

Where do banks keep their own accounts?

Hint 2

Who settles claims between two banks?

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. The function is RBI as the banker's bank (including its role as clearing house for inter-bank settlement).

    1 mark

  2. The RBI accepts deposits from commercial banks (they keep part of their reserves with it) and lends to them when required. It uses these reserves to settle inter-bank claims, so banks can transfer funds and settle their dues with each other easily.

    2 marks

  3. As the highest authority in the banking system, it also acts as the lender of last resort, supporting banks in financial distress with short-term credit against approved securities.

    1 mark

Answer: The RBI acts as banker's bank: it holds banks' reserves, settles inter-bank claims, lends to banks and is the lender of last resort.

Where the marks are

  • Function identified: banker's bank (1)
  • Explanation (3)

Revise the chapter

Practise this chapterBoard-style questions from Money and Banking, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2026-27: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.