Question

Which of the following is not a duty of the a central bank? a) Provide financial services for private banks. b) Guarantee the savings of its citizens. c) Conduct monetary policy for its respective government. d) Performing banking functions for its respective government.

Answer 1

The correct answer is option b.

Step-by-step explanation:

A central bank is the central monetary authority in a country. It performs the functions of managing currency, money supply, controlling the commercial banks, etc. For instance, the Federal reserve bank in the US, the Reserve bank of India, the Bank of Spain, etc.

There are several roles played by a central bank.

1. It acts as a bank for the government.
2. It also supervises and provides services to commercial.
3. It formulates monetary policy on behalf of the government.
4. It controls the money supply and decides the interest rate.

Though guaranteeing the savings of its citizens is not a function of the central bank.