Functions of Central bank are :

(A) Money creation

(B) Lender of last resort

(C) Issue of currency

(D) Accept deposits from the public

(E) Banker's  Bank

Choose the correct answer from the options given below :

(B), (C), (E) Only

The correct answer is option (1) : (B), (C), (E) Only

Central Bank is a very important institution in a modern economy. Almost every country has one central bank. India got its central bank in 1935. Its name is the ‘Reserve Bank of India’. Central bank has several important functions. It issues the currency of the country (C). It controls money supply of the country through various methods, like bank rate, open market operations and variations in reserve ratios. It acts as a banker to the government. It is the custodian of the foreign exchange reserves of the economy. It also acts as a bank to the banking system (E). 

When commercial banks need more funds in order to be able to create more credit, they may go to market for such funds or go to the Central Bank. Central bank provides them funds through various instruments. This role of RBI, that of being ready to lend to banks at all times is another important function of the central bank, and due to this central bank is said to be the lender of last resort (B).

1. (B) Lender of last resort: A central bank acts as the lender of last resort to provide financial assistance to commercial banks or other financial institutions during times of financial crisis or liquidity shortage. 

2. (C) Issue of currency: The central bank has the authority to issue and manage the country's currency. It regulates the money supply in the economy by controlling the issuance and circulation of currency.

3, (E) Banker's Bank: The central bank functions as a banker's bank by providing banking services to other banks. It maintains accounts for commercial banks, facilitates clearing and settlement of interbank transactions, and acts as a custodian of their reserves.

These functions are integral to the role of a central bank in maintaining financial stability and regulating the monetary system of a country.

Other options , such as money creation (A) and accepting deposits from the public (D),are not functions of a central bank but are that of commercial banks.

Therefore the correct answer is (1) (B), (C), (E) Only