The central bank is the apex bank that controls the entire banking system of a country. It is the sole issuer of currency and regulates the money supply. As the central bank of India, the Reserve Bank of India (RBI) performs key functions such as being the banker and financial advisor to the government, issuing banknotes, controlling foreign exchange reserves, acting as the lender of last resort, and regulating the credit system. The RBI has an exclusive right to issue notes which are legal tender, sets policies to manage the money market, and oversees commercial banks through supervisory roles like setting cash reserve and statutory liquidity ratios.

2.  The central bank is an apex bank that
controls the entire banking system of a
country .It is the sole agency of note issuing
and controls the supply of money in an
economy .

3.  APEX BANK
 REGULATES SUPPLY OF MONEY
 CUSTODIAN OF FOREX RESERVES
 SERVES AS BANKER TO GOVERNMENT
 RBI IS THE CENTRAL BANK OF INDIA

4.  BANK OF ISSUING NOTES
 BANKER TO THE GOVERNMENT
 BANKERS BANK AND SUPERVISORY ROLE
 LENDER OF THE LAST RESORT
 CUSTODIAN OF FOREIGN EXCHANGE
 CLEARING HOUSE FUNCTION
 CONTROL OF CREDIT

5.  Central bank of a country has an exclusive
right [monopoly right ]of issuing notes .This
is called CURRENCY AUTHORITY FUNCTION
OF THE CENTRAL BANK .The notes issued by
central bank are an unlimited legal tender .

6.  Central bank is the banker ,agent and
financial advisor to the government .
As a banker to the government ,it manages accounts of the
government .
As a agent to the govt.,it buys and sells securities on behalf
of the government .
As an advisor to the govt. ,it frames policies to regulate the
money market .

7.  As a bankers’ bank ,it has almost the same relation with other
banks in a country as a commercial bank has with its
customers .
Three observations that are needed to be noted in this context:
The central bank accepts deposits from the commercial banks
,and offer them loans .
The central bank provides clearing house facility to the
commercial banks it is a cheque clearing facility provided by
one centre to all bank.
In it supervisory role the central bank ensure that the
commercial banks show compliance to its directives
particularly relating to CRR and SLR. The central bank
changes CRR,SLR as and when required. It ensures that the
commercial banks show compliance to this changes so that
the desired targets are achieved.

8. 
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