Answer:
Central Bank: It is the apex institution of monetary system of a country. It is banker to the other banks and to government, it issues notes, controls money supply and credit, and maintains monetary stability.
Functions of Central Banks.
(a) It has the sole monopoly of issuing currency.
(b) It acts as a banker to the government - both central and state governments. It carries out all banking business of the government.
(c) It puts as an agency to regulate and supervise the proper functioning of other banks in a country.
(d) It controls credit and money supply through its monetary policy like bank rate. CRR, etc.
(e) It is a lender of lest resort for commercial banks.
(f) It maintains the external value of currency.
(g) It is the custodian of foreign exchange resources and nation's gold.
(h) It performs the clearing house function.
(i) It collects and compiles statistical information relating to banking and other financial sectors of the economy.
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