functions of central bank?????????

hi garima..well here is the answer to your question..

the main functions of central bank are as follows..

  • supervising the entire banking system : central bank is the apex banking institution in the whole country..thus it supervises the working and performance of other financial institutions in the country like land development banks..commercial banks..etc..thus they are responsible for the banking system
  • moral suasion : the central bank may or may not cooperate with the government on economic policy and may advise the government on monetary policies relating to the country and economic maters including all statistics.
  • bankers bank : central bank acts as banker to other banking institutions in the country..the central bank insists these banking institutions to hold non interest bearing reserves in accordance with their deposits held in the central banks..
  • lender of last resort : central banks acts as a lender od last resort to the banking sectors that suffer from a financial crisis for a time provides credit facilities when these banking sectors has no other option in the economy..this helps in avoiding bankrupcy for these institutions ..
  • act as a banker to the government : central bank acts as a banker to the govt as it collects revenues ,taxes ,incomes and pays forr any sort of govt expenditure on behalf of the government..

 hope these points are enuf... for any further help inform me..

cheers !!

keep smiling ..:)

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the function of central banks are as follows

  • monopoly of note issue
  • government's bank
  • banker;s bank
  • lender of last resort
  • clearing house function
  • control of credit
  • custodian of metalic reserve and international currency
  • development function
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1.ISSUE OF CURRENCY:The centeral bank is given the sole monopoly of issuing currency in order to secure control over of currency and credit.these notes circulate thoroghout the country as legal tender money.

it has to keep a reserve in the form of gold as per statutory rules against the notes issued.



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