The Reserve Bank of India (RBI) acts as a bankers’ bank. This would imply which of the following? 1. Other banks retain their deposits with the RB I. 2. The RBI lends funds to the commercial banks in times of need. 3. The RBI advises the commercial banks on monetary matters. Select the correct answer using the codes given below:

The correct answer is Option 4 (1, 2, and 3) because all three statements accurately define the multifaceted role of the Reserve Bank of India (RBI) as the "Bankers' Bank."

• Statement 1: Commercial banks are statutory required to maintain a portion of their deposits with the RBI as Cash Reserve Ratio (CRR). This ensures liquidity and safety within the banking system.
• Statement 2: The RBI acts as the Lender of Last Resort. When commercial banks face a liquidity crunch and cannot raise funds from other sources, the RBI provides financial accommodation through the repo window or MSF.
• Statement 3: As the central monetary authority, the RBI provides supervisory and advisory functions. It issues guidelines on interest rates, credit control, and operational efficiency to ensure financial stability.

Since the RBI manages their cash reserves, provides emergency credit, and oversees their operations, it fulfills the complete definition of a "Bankers' Bank."