Question

discuss any one of the following function of central bank a as government bank b lenders of last resort​

Answer 1

Explanation:

Lender to the last resort: It means that if a commercial bank fails to get financial accommodation from anywhere,it approach the central bank as a last resort . Central bank advances loan to such a bank against approved securities . By offering loans to the commercial banks in situations of emergency , the central bank ensures :

that the banking system of the country does not suffer any set -back ,and

that money market remains stable

Answer 2

Answer:

When a commercial bank faces financial crisis and fails to obtain funds from other sources, then the central bank plays the vital role of 'lender of last resort' and provides them with the financial assistance in the form of credit. This role of the the central bank saves the commercial bank from bankruptcy