Central Banks perform the role of agent and advisor of government in following ways:
(i) It keeps and manages the accounts of government i.e., it performs the same function for government as commercial banks do for their customers.
(ii) As an agent to government, it buys and sells securities on behalf of government.
(iii) As an advisor to the government. It frames policies to regulate the money market.
(iv) It also advises the government from time to time on economic matters and help them to formulate various policies.