Functions of Central Bank.ppt - Functions of Central Bank Traditional Functions Developmental Functions Functions of Central Bank Issuer of the currency

Functions of Central Bank.ppt - Functions of Central Bank...

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Functions of Central Bank Traditional Functions Developmental Functions
Functions of Central Bank Issuer of the currency Development Role Banker to Government Banker to Banks Role of central bank in inflation control formulate monetary policy manager of foreign reserve clearing house functions Regulations of Banking system Lender of the Last Resort
Functions of Central Bank Issuer of the currency To ensure adequate quantity of supplies of currency and coins and notes of good quality Issues new currency and destroys currency and securities as per circulation It has to keep in forms of gold and foreign securities as per statutory rules against notes and coins issued.
Functions of Central Bank Developmental role: Developing Specialized Financial Institutions Agriculture Development Bank Ltd Infrastructure Development Bank Micro Finance Institutions Influencing money market market and Capital Market Collecting Statistical Data
Functions of Central Bank Banker to the Government: Performs all banking function for the central and the state governments and also acts as their banker. It Makes loans and advances to the states and local authorities. It acts as adviser to the government on all monetary and banking matters.
Functions of Central Bank Banker to the Banks: Maintains banking accounts of all scheduled banks. Regulates the opening/ installation of ATM Fresh currency notes for ATMs are supplied by Central Bank The central Bank also regulates the trade of gold. Banks are involved in the trade of gold in India.
Functions of Central Bank Banker to the Banks: NRB has invited applications from banks for direct import of gold to curb illegal trade in gold and increase competition in the market. Issuances of guidelines and directives for the commercial banks.
Role of central bank in inflation control Inflation arises when the demand increases and there is a shortage of supply. There are two policies in the hands of the CB: Monetary Policy: It includes the interest rates. When the bank increases the interest rates than there is reduction the borrowers and people try to save more as the rate of interest has increased.

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