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Question : 10
Total: 18
Explain 'banker to the government' function of the central bank.
Solution:
The Reserve Bank of India acts as a Banker, agent and a financial advisor to the Central Government.
As a banker, it carries out all the banking business of the Government as :
(i) It maintains a current account for keeping their cash balances.
(ii) It accepts receipts and makes payments for the Government and carries out exchange and other banking operations.
(iii) It also gives loans and advances to the Government.
As a banker, it carries out all the banking business of the Government as :
(i) It maintains a current account for keeping their cash balances.
(ii) It accepts receipts and makes payments for the Government and carries out exchange and other banking operations.
(iii) It also gives loans and advances to the Government.
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