Q.The central bank is called the "lender of the last resort" because it:
(A) Lends money only to the general public
(B) Provides financial help to commercial banks when they cannot get funds anywhere else
(C) Is the last bank to be established in the country
(D) Lends only for one day at a time

The phrase describes an emergency role the central bank plays for other banks, not for the public and not about the order or duration of lending.

When a commercial bank faces a shortage of funds and cannot arrange them elsewhere, it can borrow from the RBI against approved securities or by rediscounting eligible bills. This role helps prevent bank failures and financial panic.

Section b lists "lender of the last resort" as one of the traditional functions of the RBI. The name captures the idea that the central bank is the final place a bank can go for funds once every other source has been exhausted.

When a commercial bank runs short of cash in a difficult situation and cannot raise funds from other banks or the market, it can approach the RBI, which provides financial accommodation by rediscounting eligible bills or lending against approved securities. Because the RBI stands ready to help in such emergencies, banks and their depositors gain confidence, and this greatly reduces the risk of bank failures and financial panic.

The other options misread the phrase: the central bank does NOT lend to the general public (A) — its customers are the government and the banks; the phrase has nothing to do with being the last bank established (C) or with the duration of a loan (D).

Do not read "last resort" literally as "last in time" or "one-day lending." It means the source of last resort — the final backstop a bank can rely on when all other options have failed.