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Money and Banking — Economics STD 12 Humanities & Commerce — Question

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsMoney and Banking3 Marks
Question
Explain the 'bank of issue' function of the Central bank.
✓

Answer

The Central bank is the sole authority for the issue of currency in the country. It promotes efficiency in the financial system. This is on account of two reasons. Firstly, this leads to uniformity in the issue of currency and secondly, it gives the Central Bank control over the money supply, which is very essential in a country.

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