The Reserve Bank of India (RBI) recently imposed a monetary penalty on three banks -₹1.50 lakhs on Dr. Ambedkar Nagarik Sahakari Bank Maryadit, ₹25,000 on Nagarik Sahakari Bank Maryadit, and ₹1 lakh on Ravi Commercial bank for violating the provisions of its regulations. The banking regulator has imposed a monetary penalty for contravention of non-compliance with the directions issued to Ravi commercial bank an exposure norms and statutory and other restrictions & KYC.

If all the depositors, come to withdraw all the cash one day, what would be role played by RBI?

Lender of last resort

In the event that all depositors attempt to withdraw their funds simultaneously, the Reserve Bank of India (RBI) would play the crucial role of Lender of last resort. This means that the RBI would step in to provide liquidity to banks that are facing a shortage of cash due to the massive withdrawals. By acting as the lender of last resort, the RBI can prevent a systemic financial crisis and ensure the stability of the Indian banking system.