Development Functions of Central Bank
The Central bank is the main government-controlled bank in a country, which controls the financial affairs of the country by fixing main interest rates, issuing currency, supervising the commercial banks and controlling the foreign exchange rate.
The development of this bank has made a revolutionary change in the banking sectors. To make a strong monetary system central bank has established. To regulate the money market and all commercial banks, the central bank is employed by the government. The Central bank is doing many significant functions for the development of the economy of a country:
Development of banking system: It works as the guardian of the banking system. It takes all necessary steps to develop the banking system. Central banks always provide contemporized steps in case of the banking system.
Development of foreign Trade: Without the help of this bank, development of foreign trade is not possible. Expansion of foreign trade and its total development is dependent on the activities of the central bank. This bank ensures the stability of the currency and thus accelerates import and export business.
Economic plan: Government takes an economic plan with the help of the central bank. It gives ads ice and provides information for the purpose of the economic annual plan.
In spite of above-discussed functions, the central bank does some other important functions.
Economic research: This bank has a research department. To take steps in the development of banking system, credit control, policies of the government, economic plan etc, economic research is essential.
Transfer of money: This bank transfers money from one source to other by the order of government.
Preparation and publication of reports: This bank prepares and publishes a periodical report of its financial condition. It has to submit it to the government.
Finally, it can be said that as the head of the economy of a country central bank does above-discussed functions. The only central bank can do those functions, which made central bank unique.