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Question
State with reason Whether you 'agree' or 'disagree' with the following statement .
Central bank works as a banker to the goverment.
Solution
Yes, I do agree with the statement.
Reasons,
Bankers to the Government: -The Central bank performs the following –
a.It transacts all banking business of the Central Governments. It accepts money on account of the government and makes payment on behalf of the government.
b.It makes temporary advances to the government.
c.It makes extraordinary advances to the government during emergencies.
d.It manages public debt and is responsible for issue of new loans.
e.It advises the government to take measures to control inflation.
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