Central Bank as Bankers' Bank and Supervisor
(i) Make Surplus Cash reserve : As the banker to the commercial banks, the Central Bank holds surplus cash reserves of commercial banks.
(ii) Provides Loan : It also gives loans to the commercial banks when they are in need of funds.
(iii) Manages Routine Banking : The Central Bank also provides a large number of routine banking functions to the commercial banks, the cheque clearing, remittance facilities, etc.
(iv) Supervise and Regulate : it also acts as a supervisor and a regulator of the banking, system. If makes rules regarding their licensing, branch exparision, liquidity of assets, amalgamation (merging of banks) and liquidation (the winding up of banks), etc. The control is exercised by periodic inapection of banks and the refurns filed by them.