Question

what is a central bank? Explain its function. Discuss the quantitative instrument and qualitative instument of credit control by central bank?
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Answer 1

Answer:

central bank is an apex institution which regulates, control and manages the banks in an economy.

functions :->

1. Clearing House function

2. banker's bank

3. banker to government

4. control of credit

5. issue of currency notes.

quantiative instruments :->

1. CRR

2. SLR

3. OMO (open market operations)

4. bank rate

5. repo rate

6. reverse repo rate.

qualitative instruments :->

1. moral suasion

2. credit Rationing

3. margin requirement