functions of Central Bank #Role of central Bank

 functions of Central Bank 

Nepals Central Bank is nepal rastra bank Which is established in 1956 AD. as per act 1955 A.D.As per NRB Act 2058 article 5 major functions of NRB is as Following:

a. To issue Bank notes and coins 

b. To formulate necessary policies in order to maintain price stabilityand to implement or cause to implement them. 

c. To determine the system of foreign exchange rate.

d. To manage and operate Foreign exchange reserve.

e. To formulate exchange policies and to implement or cause to implement them.

f. To issue license to commercial banks and financial institutions to carry on banking and financial business and to regulate, inspect, supervise and monitor such transactions.

g. To act as a banker advisor and financial agent of government of nepal. 

h.To act as the banker of commercial banks and financial institutions and to functions as the lender of the last resort. 

i. To establish and promote the system of payment clearing and settlement and to regulate these activities and 

j.To implement or case yo implement the system any other necessary functions which the bank has to carry out in order to achieve the objectives of the bank.

#Role of central Bank 

In the developing countries the central bank has to play a much wider role Beside Performing the traditional functions the central bank has to undertake responsibility of economic growth with stability in these economies. Moreover since the developing countries do not have well- organized money and capital markets the central bank has a crucial function develop the banking and financial system of the country. The central bank performs the following development and promotional roles in the developing countries.

1. Traditional Functions role

The central  banks in the developing countries perform both traditional and non- traditional functions. The traditional functions of central bank are having the monopoly of note-issue ,acting as banker to the government serving as bankers bank , functioning as the lender of the last resort, controlling and regulating the credit and maintaining the external stability..