Question

Central bank also performs commercial banking business.

• A. True
• B. False

Answer 1

The correct option is B False

False.

Central bank is an apex bank that controls the entire banking system of a country. It is the sole agency of note issuing and controls the supply of money in the economy. It serves as the banker of the government and manages foreign exchange of the government. It is also the lender of last resort for government as well as all the commercial banks. Therefore, central bank does not perform commercial bank business as it is not directly connected to the people.