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Question
Justify either for or against by giving a reason for the following statement. ‘Central Bank is a Banker to the Government.’
Solution
This assertion is correct.
The Central Bank is the government's banker. The central bank serves as the government's banker, agent, and advisor. It receives and makes payments on behalf of the government like a banker. In financial affairs, the central bank acts as the government's agent. It provides advice to the government on monetary and banking issues.
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