A central bank plays an important role in monetary and banking system of a country.

It is responsible for maintaining financial sovereignty and economic stability of a country, especially in underdeveloped countries.

“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 that country”-Bank of International Settlement.

It issues currency, regulates money supply, and controls different interest rates in a country. Apart from this, the central bank controls and regulates the activities of all commercial banks in a country.