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The Central Bank acts as an advisor of the government on financial matters. The central bank advises the government on various important economic issues such as currency devaluation, overvaluation, exchange rate fixing, price stability, government revenue expenditure and formulation of trade policy. In short, in addition to the introduction of central bank as the guardian of the banking system, there are several important functions of the Central Bank..

**(1) Issuance of currency:** The main function of the Central Bank is to issue notes. In the past, commercial banks could issue notes. But at present the central bank enjoys the exclusive right to issue notes in a country. This currency is prevalent in the country as a prescribed currency. The right to issue notes has been vested in the central bank alone so that internal and external prices remain stable. The central bank controls the supply of money by increasing or decreasing the amount of money as required.
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**(2) Government Bank:** The Central Bank acts as the Government Bank. All the income of the government is deposited in the central bank and all the expenses are borne by the central bank. The central bank, as the financial representative of the government, collects debts from various sources and pays debts to various sectors. The central bank accounts for and manages the internal and external debt of the government. The central bank deposits government currency without interest and provides short-term loans to the government as and when required. Thus, the central bank acts as the bank of the government.


**(3) Bankers of other banks:** The central bank acts as the banker of other banks. Other banks have to deposit some of their capital in the central bank. As a result, the central bank can exercise considerable influence over other banks and help them in times of need in the form of loans and by breaking first class exchange bills.

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**(4) Debt control:** The most important task of the central bank is to maintain a stable price level in the country by providing as much equality as possible in supply. The central bank has a responsibility to keep the country's price level stable through debt control. The central bank controls the credit system of the country through various means such as changing bank rates, open market transactions, changing cash deposit ratios, campaign requests or instructions.

**(5) Last source of lending:** When the country's commercial banks face a financial crisis and cannot raise loans from any other source, they are forced to take protection from the central bank. In this case, when there is no possibility to get a loan from another bank. Only the central bank protects commercial banks from financial crisis by lending.
(6) Controlling the external value of money: One of the important functions of the central bank is to determine the external value of money and to keep the exchange rate stable. The central bank sets the exchange rate of domestic currency with foreign currency and tries to keep the exchange rate stable by buying and selling foreign currency at this fixed rate.

**(6) Clearing House:** The central bank acts as a clearing house for the calculation of mutual debts among other banks. This bank settles the interbank debts incurred through checks between different banks.

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### This post is already published my another blog [Here](https://steemit.com/hive-175254/@team007/central-bank-financial-adviser-of-the-government)