Meaning And Definition of Central Bank -Nepal Rastra Bank
What is a Central Bank
A Central bank is in charge of monetary policy
Every country of the world has a central bank. In USA Federal Reserve, U.K. Bank of England, I India Reserve Bank of India and Nepal Nepal Rastra Bank. These central banks are the bankers of the other banks. They provide specialized functions i.e. issue of paper currency, working as bankers of government, supervising and controlling foreign exchange. A central bank is a non-profit making institution. It does not deal with the public but it deals with other banks. The Principal responsibility of Central Bank is through control on currency of a country.
A central bank is a bank, the essential duty of which is with the responsibility of maaging the expansion and contraction of the volume of money in the interest of the general public welfare-R.P. Kent
Central Bank is defined as an institution which is charge maintenance of stability of the monetary standard- Kisch and Elkin
A central bank is the bank in any country to which has been entrusted the duty of regulating the volume of currency and credit in the country.
First Central Bank Bank of England AD 19994
Central Bank may be defined as an institution which is charged with the responsibility of managing the expansion and contraction of the volume of money in the interest of the public welfare.- Kent
Vera Smith- The central banking is the banking system in which a single bank has either a complete or residuary monopoly in the note issue.
Hawtrey- The true function of central bank is its being lender of the last resort, that is being the ultimate source of cash and loans to the market and the economy.
Objectives Of Central Bank
Example of the central banks objectives Include;
1. Internal Price Stability
2. Full Employment
Importance and Necessities of Central Bank
Every country of the world has a central bank. In USA Federal Reserve, U.K. Bank of England, I India Reserve Bank of India and Nepal Nepal Rastra Bank. These central banks are the bankers of the other banks. They provide specialized functions i.e. issue of paper currency, working as bankers of government, supervising and controlling foreign exchange. A central bank is a non-profit making institution. It does not deal with the public but it deals with other banks. The Principal responsibility of Central Bank is through control on currency of a country.
A central bank is a bank, the essential duty of which is with the responsibility of maaging the expansion and contraction of the volume of money in the interest of the general public welfare-R.P. Kent
Central Bank is defined as an institution which is charge maintenance of stability of the monetary standard- Kisch and Elkin
A central bank is the bank in any country to which has been entrusted the duty of regulating the volume of currency and credit in the country.
First Central Bank Bank of England AD 19994
Central Bank may be defined as an institution which is charged with the responsibility of managing the expansion and contraction of the volume of money in the interest of the public welfare.- Kent
Vera Smith- The central banking is the banking system in which a single bank has either a complete or residuary monopoly in the note issue.
Hawtrey- The true function of central bank is its being lender of the last resort, that is being the ultimate source of cash and loans to the market and the economy.
Example of the central banks objectives Include;
1. Internal Price Stability
2. Full Employment
3. Financial Stability
4. Economic Growth
5. Exchange Rate stability
4. Economic Growth
5. Exchange Rate stability
6. Stability of Interest Rate
7. To Establishment and development of money market and capital market
8. Economic advisor of the government/Government bank
1. Banking Development
2. Economic stability
3. Banker's Bank
4. Government's Bank
5. Economic development
6. Control in Inflation
7. Credit Control
8. Price Stability
9. Control of foreign exchange
2. Economic stability
3. Banker's Bank
4. Government's Bank
5. Economic development
6. Control in Inflation
7. Credit Control
8. Price Stability
9. Control of foreign exchange
10. development of financial market
Principles of Central Bank
1. National Welfare
2. Monetary and fiscal stability
3. Reservoir of credit
4. Non-competitive banking institution
5. Independent institute
Functions of Central Bank
1. Traditional Functions;
i) To issue paper money
- Public confidentiality
- Uniformity in money issued
- Easiness in credit control
- Control in value of money
- Economy
- Elasticity
- Stability
- Easiness in monitoring and controlling
ii) Government bank
iii) Economic advisor of the government
iv) Custodian of cash reserve of commercial bank
v) Controlling the foreign exchange
vi) Lender of the last resort
vii) Clearing house facility
viii) Controller of the credit
2. Developmental functions;
i) Economic Development
ii) Development of banking system
iii) Contribution to the development of financial institution
iv) Publication of economic data
v) Counting of loan that to be flowed to the poor sector
vi) Development Finance
vii) Establishing the commercial banks in joint ventures
Role of Central Bank for Economic Development
1. Development of banking and financial institutions
2. Proper adjustment between demand and supply of money
3. A Suitable interest rate policy
4. Debt Management
5. Training Management
6. Credit Control
7. Solving the problems of balance of payment
Comments