Functions of Central Bank

&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad1" id&equals;"quads-ad1" style&equals;"float&colon;left&semi;margin&colon;0px 0px 0px 0&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;<p>Central bank is an important organization for any country&period; It performs traditional and developmental role to accomplish macro-economic objectives&period; This includes currency issuance&comma; regulation of liquidity&comma; supervision of banks and secondary markets&comma; exchange rate management&comma; balance of payment&comma; establishment and development of financial institutions&period;<&sol;p>&NewLine;<p>Central bank is the center of banking system of any country and has sole authority to control and regulate the supply of money&period; Central bank controls the supply of money by keeping the welfare of people in mind as primary object&period;  Functions of central bank are discussed in detail below&period;<&sol;p>&NewLine;<h3>Monopoly over Issuing Currency<&sol;h3>&NewLine;<p>&lbrack;linkunit&rsqb;The primary function of central banks is to issue money in the country&period; Central bank issue currency notes by following certain regulations enforced by the state&period; There are different requirements which central bank need to fulfill for this purpose&comma; one important prerequisite is keeping reserve against issued money&period;  Some important advantages for this sole authority are&colon;<&sol;p>&NewLine;<blockquote><p>&&num;8211&semi; Credit creation by commercial banks can be checked and controlled by central bank&period;<br &sol;>&NewLine;&&num;8211&semi; Central Bank has the confidence of people as it has the government backing and recognition&period;<br &sol;>&NewLine;&&num;8211&semi; As the sole authority of issuing currency there is uniformity in the country’s currency&period;<br &sol;>&NewLine;&&num;8211&semi; Government can use this sole authority for the best interest of people&period;<&sol;p><&sol;blockquote>&NewLine;<h3>Government Agent and Advisor<&sol;h3>&NewLine;<p>It acts as the government bank and agent&comma; to collect and pay transactions on behalf of the government&period;  Central bank has a detail record of all monetary issues and present in good position to advise government for monetary&comma; banking and financial issues&period;<&sol;p>&NewLine;<h3>Bankers Bank<&sol;h3>&NewLine;<p>It is the bank for all commercial banks and monitor and control all commercial banks by its regulations&period; Commercial banks keep reserves with central bank as a requirement&period; Central bank also helps commercial banks in their daily business life by providing loans&comma; security to cash reserves and gives them advice on financial and economic issues&period;<&sol;p>&NewLine;<h3>Clearing House<&sol;h3>&NewLine;<p>Another important function central bank does for commercial banks is acting as a clearing house for settle all the bill and checks drawn one another&period;<&sol;p>&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad2" id&equals;"quads-ad2" style&equals;"float&colon;none&semi;margin&colon;0px 0 0px 0&semi;text-align&colon;center&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;&NewLine;<h3>Lender of the Last Resort<&sol;h3>&NewLine;<p>Central bank helps commercial banks when they face any crisis&comma; central bank come to rescue by advancing loans and bailout packages&period;<&sol;p>&NewLine;<h3>Credit Control<&sol;h3>&NewLine;<p>Credit Control becomes an emerging vital function of Central Banks&period; Although monitoring and controlling credit been always a function of central banks but as the technology grew and use of plastic and e-transaction is becoming more common there are many sensitive monetary issues arises&period; Central Banks take quantitative and qualitative methods for credit control such as bank rate&comma; open market operation and moral situations etc&period;<&sol;p>&NewLine;<h3>Financial Agent<&sol;h3>&NewLine;<p>Central bank works as government agent for foreign exchange and gold transactions&period;&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad3" id&equals;"quads-ad3" style&equals;"float&colon;none&semi;margin&colon;0px&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;&NewLine;