Question

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

• A. Issue of currency
• B. Banker to the Government
• C. Accepting deposits from the general public
• D. Custodian of foreign exchange

Hint:

Central Bank deals with banks and the government (it is a "Banker's Bank"). Commercial Banks deal with the general public (households and firms).

Answer 1

The Correct Option is C

Step 1: Understanding the Concept:
The Central Bank is the apex financial institution of a country (e.g., RBI in India). It manages the monetary system and does not interact with the public for retail banking.
Step 2: Detailed Explanation:
(A) Issue of currency: The Central Bank has the sole authority (monopoly) to issue currency notes.
(B) Banker to the Govt: It manages the accounts of the government and provides loans to it.
(C) Accepting deposits: This is a Commercial Bank function. Individuals open savings/current accounts in commercial banks (like SBI), not the Central Bank.
(D) Custodian of foreign exchange: The Central Bank maintains and manages the nation's foreign exchange reserves.
Step 3: Final Answer:
Option (C) is the correct answer as it is a function performed by commercial banks, not the central bank.