Question

Describe the 'banker to the banks' function of Central bank.

Answer 1

Answer:

Central Bank is called the bankers bank because it

1 helps in managing and governing the banks.

2- it facilitates the guidelines and ensures proper working of the bank

3- it acts as a regulatory authority and provided Bank with credits in case of crisis.

4- it also helps in maintaining and regulating the interest rates, repo rate and reverse repo rate according to the market conditions.

5- helps in credit creation or income generation by regulating the repo rate and reverse repo rates.

6- Monitors the bank policies for credit creation and helps them if there is shortage of liquid funds.

Answer 2

Hello !

Functions of Central Banks

1. Bank of Issue

2. Banker to the Government

3. Banker’s Bank and Supervisor.

4. Controller of credit.

5. Lender of last resort

6. Custodian of foreign exchange reserves

Hope It Helps u :)