Commerce Paper 1,Nov/Dec 2009  
Questions: 1 2 3 4 5 6 7 8 9 10 Main
General Comments

Question 6

  • State five functions of a development bank.
  • Give five reasons why a central bank is described as a bank to the government.



The functions of a development bank and the reasons for referring to the central Bank as a            government banker were not known by many candidates.
            (a)        The key function of a development bank are:
Investment advice and conducting feasibility studies;

  1. Management of projects;
  2. Provision of equity capital and underwriting security issue
  3. Undertaking of research.
  4. Reasons for referring to the Central Bank as a Banker to government

Holds government deposits;

  • Payment on behalf of government;
  • Manages the national debt;
  • Issues currency on behalf of government;
  • Manages country foreign resources;
  • Govern representative at IMF and other International finance organizations.
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