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THE CENTRAL BANK INTRODUCTION

THE CENTRAL BANK INTRODUCTION. Central bank is the most powerful economic institution of country. Central bank occupies an important place in the monetary & banking system of every country. It is the apex bank of a country’s monetary and financial system.

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THE CENTRAL BANK INTRODUCTION

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  1. THE CENTRAL BANKINTRODUCTION • Central bank is the most powerful economic institution of country. Central bank occupies an important place in the monetary & banking system of every country. • It is the apex bank of a country’s monetary and financial system. • It was established on April 1,1935 under the RBI Act 1934. • It was nationalised on Jan 1,1949.

  2. DEFINITION OF CENTRAL BANK • According to O.S. Pugh, A Central Bank is a national financial institution created to operate, not for profit, but for the public purpose of influencing the economy in desirable directions through monetary means……

  3. CHARACTERISTICS OF CENTRAL BANK • Apex institution • No profit motive • Control the economy • Use of monetary means

  4. FUNCTIONS OF CENTRAL BANK • Bank of note issue • As banker, agent and advisor to the govt • As an agent • As financial advisor • Cash reserve ratio management • Custodian of foreign exchange reserve of nation • Lender of last resort • Clearing house function • Controller of credit • Collection of data • Agricultural credit • Maintaining international relations • Lender of last resort

  5. MEANING OF CREDIT CONTROL • Credit control refers to the regulation of credit by the central bank for achieving the objective of economic growth and development. In the modern times, the main function of the central bank is to manage and control and monetary system of the country Or the policy of credit expansion and credit contraction is called credit control

  6. METHODS OF CREDIT CONTROL

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