What Are The Main Functions Of Central Bank?
Functions of Central Bank: The important functions of Central Banks are as follows:- 1-Sole right of note issue The Central Bank in every country, now, has the monopoly note issue. The issue of notes is governed by certain regulation which is enforced by the state. 2-Banker to the state A Central Bank acts as a banker to the government. It holds cash balances of the government free of interest. 3-Banker’s bank. The central bank acts as a banker to the commercial banks. 4-Banker’s clearing house The Central Bank acts as a clearing house for the settlement of mutual obligations of different commercial banks. If a difference exists, it is paid by a cheque drawn on the banks accounts carried at the Central Bank. 5-Lendor to the last resort The Central Bank helps the member banks in times of crisis. 6-Financial agent The Central Banks act as financial agents for the government. It is an agent for the government in purchasing and selling of gold and foreign exchange. 7-Effective monetary pol
