Question

Explain banker to the government function of central bank

Answer 1

As a normal commercial bank carries out transactions, issues loans, takes deposits for its customers, a central banks performs same functions but for the state or government only.  

- Govt. or state deposits the cash with central bank.

- Central bank makes all payment on the behalf of government.  

- Central bank lends money on temporary basis to the government whenever needed.  

Answer 2

Answer:

╭☞ carries out banking business of the government and the government keeps its cash balances on current account with the Central Bank. It issues loans and advances to the government and does buying and selling of securities on behalf of government