Use app×
Join Bloom Tuition
One on One Online Tuition
JEE MAIN 2025 Foundation Course
NEET 2025 Foundation Course
CLASS 12 FOUNDATION COURSE
CLASS 10 FOUNDATION COURSE
CLASS 9 FOUNDATION COURSE
CLASS 8 FOUNDATION COURSE
0 votes
2.1k views
in Economics by (49.5k points)
closed by

Discuss the role of the Central Bank as the banker and fiscal agent to the Government.

1 Answer

+1 vote
by (46.2k points)
selected by
 
Best answer

The central bank acts as the banker to the Government. The Government maintains an account with the central bank just as individuals keep their accounts in the commercial banks. All incomes of the Government are deposited into this account. All the expenses of the Government are incurred out of this account. If necessary, the Government can borrow from the Central Bank. As a fiscal agent, the central bank is in charge of managing the Government’s public debt i.e. it sells Government’s bonds to the public, pays regular interest and repays the loan after the maturity date.

Welcome to Sarthaks eConnect: A unique platform where students can interact with teachers/experts/students to get solutions to their queries. Students (upto class 10+2) preparing for All Government Exams, CBSE Board Exam, ICSE Board Exam, State Board Exam, JEE (Mains+Advance) and NEET can ask questions from any subject and get quick answers by subject teachers/ experts/mentors/students.

Categories

...