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Functions of Central Bank

The document outlines the key functions of a central bank, which include: 1) Acting as a bank of issue to regulate the currency supply and volume in a country. 2) Serving as the government's banker, agent, and advisor by maintaining cash reserves for commercial banks, providing loans, facilitating clearinghouse activities, and advising banks on lending. 3) Acting as the custodian of a country's foreign exchange reserves.

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Ritesh Kothari
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151 views7 pages

Functions of Central Bank

The document outlines the key functions of a central bank, which include: 1) Acting as a bank of issue to regulate the currency supply and volume in a country. 2) Serving as the government's banker, agent, and advisor by maintaining cash reserves for commercial banks, providing loans, facilitating clearinghouse activities, and advising banks on lending. 3) Acting as the custodian of a country's foreign exchange reserves.

Uploaded by

Ritesh Kothari
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Functions of Central Bank

_ Raj Kothari_
343
 Central bank
◦ “The bank in any country to which has been
entrusted the duty of regulating the volume of
currency in that country”
Functions are
 A bank of issue

 Government’s banker,agent and advisor

 Central bank as a banker’s bank


a) Maintaining cash reserves of the commercial bank
b) Advancing Loans
c) Clearing house
d) Advice to banks in lending
 Custodian of foreign exchange reserves of
the country.

 Controller of credit

 Financial and monetary Inf

 Miscellaneous functions
Credit Control
 What is credit control ?

“Adjustment in the volume of credit to the


requirements of the economy and to bring
about the redistribution of the same,in
various direction”

 Methods
◦ Quantitative CC
◦ Qualitative CC
Methods of Credit Control
 Quantitative  Qualitative
1. Margin Requirements

1. Bank Rate 2. Consumer Credit

3. Credit rationing
2. Open Market
Operations 4. Directives

Moral Suasion
3. VRR 5.

6. Direct Action
Thank u

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