Question

What is meant by a central bank? Why is it known as the apex body?

Answer 1

A central bank is a monetary institution, which fully controls the production, circulation, and the supply of money in the market, seeking to regulate the member banks and stabilize a nation's economy and national currency.It is known as the apex body because of following functions:

1. Monetary Authority

2. Issuer of Currency

3. Banker to the Banks

4.Regulator of the Banking System

5. Manager of Foreign exchange

6. Maintaining Financial Stability

7. Development Role