The document discusses the central bank and its functions. It defines a central bank as a bank that regulates currency and credit in a country. The central bank controls and directs the entire banking system. Some key functions of central banks include issuing currency, conducting monetary policy, managing foreign exchange reserves, acting as a lender of last resort, and maintaining price stability while supporting economic growth. Central banks also manage public debt, provide advice to governments, and maintain relationships with international financial institutions. The Reserve Bank of India is the central bank of India and was established in 1935 to regulate the country's currency, banking system, and money supply.

1. TOPIC :
CENTRAL BANK
AND
ITS FUNCTIONS

2. CENTRAL BANK
“A central bank is a bank in any country to which has been entrusted
the duty of regulating the volume of currency and credits in a country”.
The central bank is an apex bank that controls , operates , regulates and
directs the entire banking system of a country.
Central bank was established in india on 21 december 1911.

3. 


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Bank of england was the world’s first effective
central bank that was established in 1694.
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Since 1920, central banks are formed in almost every
country of the world.
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In india,RBI operates as a central bank and was
formed in 1935.

5. FUNCTIONS OF CENTRAL BANK

Traditional Functions : Which are generally performed by central banks
all over the world, are classified into two groups:-

Primary Functions: including issue of notes, regulation of financial
system, and conduct of monetary policy.

Secondary Functions: including management of public debt,
management of foreign exchange, advising the government on policy
matters, and maintaining close relationships with the international
financial institutions.

Non-Traditional Functions: these functions are performed by the Central
Bank include development of financial frame work, provision of training
facilities to bankers, and provision of credit to priority sectors.

6. FUNCTIONS OF CENTRAL
BANK
The main functions of a central bank are common all
over the world. But the scope and content of policy
objectives may vary from country to country and from
period to period depending on the economic situations
of the respective country. Generally all the central
banks aim at achieving economic stability along with a
high growth rate and a favourable external payment
position through proper monetary management.

7. The common functions of central banks are as
below:
1. Regulator of currency
2. Banker, Agent and Adviser to the Government
3. Custodian of cash Reserves of commercial
banks
4. Custodian and Management of Foreign
Exchange reserves
5. Lender of the last resort
6. Clearing house Function
7. Controller of credit

10. OTHER FUNCTIONS
The central bank performs many additional
functions. It has to study all problems relating the I
) credit
ii) fluctuations in price level
iii) fluctuations in foreign exchange value.
It has to collect monetary and financial statistics,
conduct research and provide information. It has
to look after the matters relating to IMF and the
World Bank. All together, the central bank is the
financial and monetary guardian of the nation.

12. QUALITATIVE OR SELECTIVE METHOD OF CREDIT CONTROL

The qualitative or the selective methods are directed
towards the diversion of credit into particular uses or
channels in the economy. Their objective is mainly to
control and regulate the flow of credit into particular
industries or businesses. The following are the important
methods of credit control under selective method:
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1. Rationing of Credit.
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3. Moral Suasion.
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6. Regulating the Marginal Requirements on Security
Loans.

13. DIFFERENCE BETWEEN COMMERCIAL BANK AND CENTRAL BANK

14. RESERVE BANK OF BANK
The Reserve Bank of India was established on April 1, 1935 in accordance with the
provisions of the Reserve Bank of India Act, 1934.
- The Central Office of the Reserve Bank was initially established in Calcutta but was
permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and
where policies are formulated.
- though originally privately owned, since nationalisation in 1949, the Reserve Bank is fully
owned by the Government of India.
Preamble
- The Preamble of the Reserve Bank of India describes the basic functions of the Reserve
Bank as:
- "to regulate the issue of Bank notes and keeping of reserves with a view to securing
monetary stability in India and generally to operate the currency and credit system of the
country to its advantage; to have a modern monetary policy framework to meet the
challenge of an increasingly complex economy, to maintain price stability while keeping in
mind the objective of growth."

16. BIBLIOGRAPHY
1.www.google.co.in=images+of+central+bank&chi
ps=q:images+ and+its+functions
2. www.wikipedia.com
3. www.google.co.in
4.https://www.rbi.org.in
5. Macroeconomics : BY T.R.JAIN
6. Macroeconomics : BY SANDEEP GARG

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