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Question
Give reason or explain the following statement:
As a banker for the government, the central bank transfers government funds.
Solution
The Central Bank transfers government funds from one place to another place and form one account to another account. In India, the Reserve Bank of India has branches in Mumbai, Delhi, Kolkata, Chennai, Kanpur, etc. It has five zonal offices and 19 regional offices in most state capitals. At other places, the branches of the State Bank of India act as agents of the Reserve Bank of India. This helps in the transfer of the government funds. Thus, as a banker to the government, the Central Bank transfers government funds.
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