Which of the following is not function of central bank
Answer Details
The central bank is the main regulatory authority of the financial system of a country, which performs various functions to ensure the stability of the economy.
Among the functions of the central bank, accepting deposits from the public is not one of them. The central bank does not accept deposits from the general public because its primary focus is on regulating the monetary policy of the country and maintaining financial stability.
The functions of the central bank include:
1. Banker to the Government: The central bank acts as a banker to the government, where it manages the government's accounts, handles government transactions, and manages the public debt.
2. Banker's Bank: The central bank is the banker's bank, which means that it provides services to other commercial banks such as lending money, maintaining accounts, and clearinghouse facilities.
3. Responsibility for Monetary Policy: The central bank is responsible for implementing monetary policy, which involves managing the money supply and interest rates to control inflation and promote economic growth.
4. Lender of Last Resort: The central bank acts as a lender of last resort, which means it provides funds to banks or other financial institutions facing financial distress and helps prevent bank runs or systemic financial crises.
In summary, the central bank performs crucial functions in regulating the economy and financial system of a country. However, it does not accept deposits from the public, as its main focus is on maintaining financial stability and regulating monetary policy.