0
You visited us 0 times! Enjoying our articles? Unlock Full Access!
Question

Explain 'bank of issue' function of central bank.

Solution
Verified by Toppr

The central bank is the bank of issue. It has a monopoly of note issue. Notes issued by it circulate as legal tender money. It has its issue department which issues notes and coins to commercial banks.
Coins are manufactured in the Government mint but they are put into circulation through the central bank.
However, the currency issued by the central bank is its monetary liability. In other words, the central bank is obliged to back the currency issued by its asset of equal value such as gold, coins, and bullions.
In addition to issuing currency to the general public, the central bank also issues currency to the central Government of the country.

Was this answer helpful?
1
Similar Questions
Q1
Explain 'bank of issue' function of central bank.
View Solution
Q2

Explain "Note Issue" function of central bank.

OR

Explain "Banker to the government" function of central bank.

View Solution
Q3
Explain the following functions of the central bank: (i) Bank of issue (ii) Banker's bank.
View Solution
Q4

Explain the 'bank of issue' function of the central bank.

View Solution
Q5
Explain 'Government's Bank' function of the central bank.
View Solution