Central Bank of India and It's Features

Topics: Bank, Debt, Commercial bank Pages: 2 (335 words) Published: August 26, 2013
Central bank of india
1. Monopoly of Note-Issue:
Note-issue primarily is the main function of a central bank in every country. These days, in all the countries where there is a central bank generally it has got the monopoly or the sole right of note-issue Banker, Agent & Adviser to the Government:

As banker to the government, central bank provides all those services and facilities to the government which public gets from the ordinary banks. It operates the accounts of the public enterprises. It manages government departmental undertakings and government funds and when there is a need gives loans to the government.   Custodian of Cash Reserves of Commercial Bank:

Central bank is the bank of banks. This signifies that it has the same relationship with the commercial banks in the country which they have with their customers. It provides security to their cash reserves, gives them loan at the times of need, gives them advice on financial and economic matters and works as clearing house among various member banks. Custodian of Nation's Reserves of International Currencies:

Central bank is the custodian of the foreign currency obtained from various countries. This has become an important function of central bank, these days, because with its help it can stabilize the external value of the currency.  Lender of the Last Resort:

Central bank works as lender of the last resort for commercial banks because in the times of need it provides them financial assistance and accommodation. Clearing House Function:
All the commercial banks have their accounts with the central bank. Therefore, central bank settles the mutual transactions of banks and thus saves all banks contacting each other individually for setting their individual transactions, in this way; the unnecessary cash transactions between individual banks are avoided. Credit Control:

This is a very important function. These days, the most important function of central bank is to control the volume of credit...
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