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Explain the 'bankers bank'

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Explain the 'bankers bank'
  • 1 answers

Gaurav Seth 4 years, 9 months ago

Banker’s bank functions of the Central Bank:
The Central Bank is an apex bank of all banks in the country. It has almost the same relationship with other banks in the country as a commercial bank has with its customers. The Central Bank keeps some cash balances of the commercial banks as a compulsory deposit. This is to help them during financial crises. In this way, the central bank acts as a custodian of cash reserves of commercial banks. It assists these banks through discounting of approved securities and bills of exchange.

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