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Question
What is a central bank?
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Solution
A central bank is an organisation that oversees a country's monetary system. The central bank offers financial and banking services to its country's government and commercial banking system, as well as implementing monetary policy and creating currency. Thus, a central bank is an institution that manages a country's currency, money supply, and interest rates.
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RELATED QUESTIONS
Read the extract given below and answer the questions that follow:
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MONEY CONTROL NEWS June 12, 2023/07: 05 PM IST The Reserve Bank of India (RBI) on June 12 imposed monetary penalties on four cooperative banks citing various rule violations. These are Cooperative Bank of Rajkot, Telangana State Cooperative Apex Bank Ltd, The Bihar State Cooperative Bank Ltd and Jowai Cooperative Urban Bank Ltd. The RBI's enforcement operations are conducted by the Enforcement Department. The RBI's EFD was set up in April 2017 to separate enforcement action from the supervisory process. The EFD identifies actionable violations from the inspection reports, risk assessment reports and scrutiny reports. Market intelligence reports, references from the top management and complaints are also used for investigation. |
- Which type of credit control method of the RBI has been highlighted in the above case study?
- Citing reasons state the advantage of credit card over currency notes.
- Briefly explain the following credit control methods adopted by the Central Bank:
- Publicity
- Moral suasion
Banking is a relationship-oriented industry. Give two reasons either for or against.
In India, the Reserve Bank of India. (The central bank of the country) was nationalised in ______.
A Central Bank is an apex institution in the banking structure of a country.
