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Questions
Explain bankers bank function of a Central bank.
Explain the following functions of this institution:
Bankers Bank
Solution
Banker’s bank functions of the Central Bank:
The Central Bank is an apex bank of all banks in the country. It has almost the same relationship with other banks in the country as a commercial bank has with its customers. The Central Bank keeps some cash balances of the commercial banks as a compulsory deposit. This is to help them during financial crises. In this way, the central bank acts as a custodian of cash reserves of commercial banks. It assists these banks through discounting of approved securities and bills of exchange.
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