Write short notes on: 1. Definition of a Central Bank

Write short notes on:

1. Definition of a Central Bank
Answer: 

1. The Central Bank is the apex institution of a country's monetary system. It regulates and controls the activities of all the commercial banks and other financial institutions of the country. It plays a pivotal role in the organisation and development of a sound monetary and financial system in an economy. In India, the Reserve Bank of India (RBI) is the central bank.

The following are some of the definitions of central bank.

According to Prof. Paul. A Samuelson Central bank is a bank of bankers. It's duty is to control the monetary base and through the control of high powered money to control the community's supply of money

According to Prof. Hawtrey  Central Bank is that which the lender of last resort

No comments: