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Central Bank (the bankers bank (All commercial banks in the country must…
Central Bank
the bankers bank
All commercial banks in the country must have their accounts with the central bank, enabling the central monetary authority easily to manage the claims made by banks against each other.
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the governments bank
It maintains bank accounts of the government such as receiving deposits from government and short-term loans.
The central bank operates as a banker to the government, performing same functions as as a commercial bank.
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Commercial bank
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Primary functions
Making advances
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Allowed overdraft (allows approved customers to withdraw more money than they actually have in their account)
Allowed mortgages ( long-term secured loans for the purchase of assets such as residential property)
Accepting deposits
Accepting deposits from customers include individuals, businesses and government.
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Credit creation
Commercial banks create their own credit card and allowed the borrower to gain power to using money by promising to pay the lender back in the future.
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