Question

From the statements given below, identify the ones that don't belong to the characteristics of Central Bank?

1. Supreme bank of a country
2. Custodian of Nation's Reserve
3. Deals directly with the public

• A. Only 1
• B. Only 2
• C. Only 3
• D. None of these

Answer 1

Answer:

C. Only 3

Characteristics of Central Bank:

• Apex Institution or Supreme bank of a country.
• Maximise Public Welfare through monetary policies.
• It does not deal directly with the public.
• No profit motive. Its main aim is to regulate the economic activities of the country.
• It is wholly owned by the Government and has no private participation.
• Through economic policies the central bank controls  the inflationary and deflationary tendencies of the economy.
• Custodian of Nation's Reserve
• It has wide powers which help it to regulate and stabilize the economy.
• To stabilize monetary and fiscal activities.
• The Central Bank should aim at stabilizing the effective supply of money to avoid disturbances in the economy.
• To promote economic development.
• Monitory policy is fixed by RBI.
• It addresses interest rates and the supply of money in circulation.
• Fiscal Policy is fixed by Ministry of Finance, Govt of India.
• It addresses taxation and government spending.