Question

Explain 'Banker to the Government' function of the central bank.

Answer 1

The central Bank acts as a banker and financial advisor to the government. As a banker to the government, it performs the following functions.

$1$. It manages the account of the government

$2$ It accepts receipts from the government and makes payment of behalf of it.

$3$ It grants short-term loans and credit to the government.

$4$ It performs the task of managing the public debt.

$5$ The central bank advises the government on all the banking and financial matter.