Explain the following functions of the Central Bank :

(i) Banker’s bank

(ii) Authority of currency issue

The central bank of the country is the apex banking Institution of the company. The Reserve Bank of India is the Central Bank of India.

(i) Banker’s bank-

● Central Bank of a country is a banker's Bank to all the other banks of a country.

● It holds the surplus cash reserve of a commercial bank.

● It also lends out funds to the commercial bank whenever there is any need.

● It also provides many other banking functions to the bank.

● It acts as a supervisor and regulator to the banks.

(ii) Authority of currency issue -

● The central bank of a country has the sole authority to issue currency in our country.

● It leads to uniformity in the system of the issuance of currency and promotes efficiency in the financial system.

● It also gives more control to the central bank over the supply of money.