discuss the following functions of the central bank in detail of bank of othe bank
Answers
Answer :
issue of currency notes :->
central bank is only having authority to issue thr currency notes except coins
banker's bank :->
-> central bank performs all functions of commercial banks same as commercial bank performs of public are as under :->
- it accepts deposits of commercial bank
- it lends money to commercial bank
custodian of cash reserve :->
-> as per the guidelines of Central Bank some amount is legally kept aside by the way of CRR and SLR so the reserve CRR is held by Central bank.
banker's to government :->
-> it also performs all functions of government
- it accept depositis money of government
- it lends money to government
- sale/purchase of government securities in open market.
clearing House function :->
-> central bank performs a special function of settling the accounts called clearing House function.
lender of last resort :->
-> if all commercial banks failed to get deposits then central bank is the last resort who lend money to them