The correct answer is: C. Both A and B
Development Financial Institutions (DFIs) are financial institutions that provide long-term loans and other financial assistance to businesses and other organizations. DFIs are usually helped by government and regulatory bodies, which provide them with funding support.
One of the ways in which government and regulatory bodies provide funding support to DFIs is through lines of credit from the Reserve Bank of India (RBI). Lines of credit are loans that are available to DFIs on a short-term basis, and they can be used to meet the liquidity needs of DFIs.
Another way in which government and regulatory bodies provide funding support to DFIs is through Statutory Liquidity Ratio (SLR) bonds. SLR bonds are bonds that are issued by the RBI, and they are required to be held by banks and other financial institutions. The proceeds from the sale of SLR bonds are used by the RBI to provide funding support to DFIs.
Both lines of credit from the RBI and SLR bonds are important sources of funding support for DFIs. These instruments help DFIs to meet their liquidity needs and to provide long-term loans to businesses and other organizations.
Here is a brief explanation of each option:
- A. Lines of credit from RBI
Lines of credit are loans that are available to DFIs on a short-term basis. They can be used to meet the liquidity needs of DFIs.
- B. Statutory Liquidity Ratio bonds
SLR bonds are bonds that are issued by the RBI. They are required to be held by banks and other financial institutions. The proceeds from the sale of SLR bonds are used by the RBI to provide funding support to DFIs.