Explain bankers's bank.

1.	Explain bankers's bank.
Answer» Central Bank referred to as a Banker’s Bank because Central Bank has almost the same relation with the other commercial banks of the country that the commercial banks have with the common public. Central Bank keeps the cash balances of commercial banks and issues loans to them on requirements, in the same manner as the commercial banks do for its customers. That’s why , it is also called as bankers’ bank. Commercial Banks are required to keep a certain minimum percentage of deposits as cash reserves with the Central Bank. Central Bank uses these reserves to meet emergency requirements of Commercial Banks. It is called Banker's Bank.

Answer»

Central Bank referred to as a Banker’s Bank because Central Bank has almost the same relation with the other commercial banks of the country that the commercial banks have with the common public. Central Bank keeps the cash balances of commercial banks and issues loans to them on requirements, in the same manner as the commercial banks do for its customers. That’s why , it is also called as bankers’ bank.

Commercial Banks are required to keep a certain minimum percentage of deposits as cash reserves with the Central Bank. Central Bank uses these reserves to meet emergency requirements of Commercial Banks. It is called Banker's Bank.

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