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Banks and Their Functions

State with re...

Question

State with reasons whether you agree or disagree with the following statements.
Central Bank is a profit making institution.

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Solution

No, I do not agree with this statement.
The central bank has to supervise the functioning of commercial banks so as to protect the interest of the depositors and ensure development of banking on sound lines.
The business of banking is a public service necessitating legislative safeguards to prevent bank failures.
Thus the Central bank works with a service motive an not for profit making.

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