Can You Describe The Principles And Objectives Of Central Banking?

1. Public welfare and not profit: An ordinary bank is run for profits. The aim of central bank is not run for profits but to safeguard the supreme interest of the nation and work for the general welfare of the people.

2. Dealings with other banks: A central bank carries on most of its operations and dealings with other bank rather then general public. It performs many services for commercial banks which the later make available to the general public.
3. Stability and growth of banking system: A central bank is responsible for the stability, growth and regulation of the monetary and banking system of the country.

4. Fair distribution of credit: The central bank is a reservoir of credit and the lender of last resort for the commercial bank. It should make fair distribution of credit in the country. Policy of partiality should not be adopted by the central bank.
5. Free from politics: It is one of the object of the central bank that it should be free from the politics. It should not be sub-servant to a political party. It must be independent of all the political influence. So it can act freely without fear or favor, in the best interest of the nation as a whole.

6. Encouraging economic development: Central bank is responsible for the growth and development of the country. It should devise ways and means which are helpful in the economic development of the country. The object of central bank is to provide direct financial assistance to the important sectors of the economy.