Section 18 of RBI Act : Section 18: Power Of Direct Discount

Explanation using Example

Imagine a situation where there is a sudden downturn in the economy, and small businesses are struggling to obtain credit from regular commercial banks. The Reserve Bank of India (RBI), in an effort to stimulate the economy and support these businesses, decides that it is necessary to intervene.

In accordance with Section 18 of the Reserve Bank of India Act, 1934, the RBI determines that this economic slump is a special occasion that warrants their action to regulate credit for the benefit of t...

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