Question

Which of the following is not a function of a Central Bank?

• A. Controls money supply
• B. Acts as a banker to the government
• C. Accepts deposits and loans to people
• D. Issues currency of the country

Answer 1

The Correct Option is C

To identify the activity not performed by a Central Bank, one must first comprehend its core duties. Central Banks generally undertake the following functions:

• Manages the money supply: This involves overseeing the nation's money supply and monetary policy to maintain economic stability.
• Serves as the government's bank: It offers financial services to the government, such as managing its accounts and public debt.
• Issues national currency: The Central Bank is tasked with producing and regulating the country's money.

The statement “Accepts deposits and loans to people” outlines a role typically performed by commercial banks, rather than a Central Bank. Central Banks interact with the government and other financial entities, but not directly with the public for deposit and lending activities.

Consequently, the accurate response is: Accepts deposits and loans to people