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Why is central bank acts as …

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Why is central bank acts as a banker to banks

Posted by Nayana Ummu 5 years, 10 months ago

CBSE > Class 12 > Economics

1 answers

Ankit Kumar 5 years, 10 months ago

As central bank is being a sole and monetary authority of the country,it holds cash reserves of the commercial banks.From this cash reserves it lends commercial banks time to time to meet their financial needs.Central bank also provides cheque clearing and remmitance facilities to Commer banks.In this way a central bank acts as a banker to banks.

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