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Question
Explain the following term/concept in detail.
Central Bank
Solution
The central bank is the apex financial institution in the banking industry in the country. Every country has its own central bank. In India, The Reserve Bank of India (RBI) is the central bank. The RBI was established in 1935 under the Reserve Bank of India Act, of 1934. Some functions of RBI are as follows:
- Frames monetary policy
- Issues currency notes
- Acts as a banker to the Government.
- Acts as a banker's bank to commercial and other banks in India.
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Study the following case/situation and express your opinion
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