Discussion
The IDBl can grant a ------------ and advances to other financial institutions.
Answer: C
Correct answer: Both (a) and (b)
IDBI could extend both. A line of credit is a sanctioned limit the borrowing institution draws on as its own lending requires; a loan or advance is a specific sum for a specific purpose.
Both were used because the other institutions' needs varied - a state finance corporation with a steady flow of small loans is better served by a standing limit than by repeated applications. This is the same apex logic as refinance: IDBI supplied resources to the institutions that lent to industry, rather than lending to every industrial concern itself.
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