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Central Bank Act: Key Definitions and Provisions

The Central Bank Act has been amended to include new definitions and provisions aimed at promoting financial stability and economic growth. The following are key extracts from the revised act:

Raising of Funds

According to Section 3, “raising of funds” means the process of collecting money or other assets for the purpose of lending, investing, managing, or dealing in such funds. This definition does not include one-time fundraising activities for non-financial purposes.

General Reserve

The “General Reserve” is a vital component of the Central Bank’s operations, established under Section 20. The General Reserve serves as a buffer to maintain financial stability and ensure the smooth functioning of the economy.

Governor, Secretary, and Notes/Coins

  • Governor: refers to the head of the Central Bank, responsible for overseeing its operations.
  • Secretary: is the administrative head of the bank.
  • Notes and Coins: are currency notes and coins issued under the terms of this Act.

Other Definitions

In addition to these key definitions, the revised act also includes provisions on various other topics, including:

  • The role of the Central Bank in maintaining financial stability
  • The management of foreign exchange reserves
  • The regulation of commercial banks
  • The supervision of non-bank financial institutions

These revisions aim to strengthen the Central Bank’s ability to promote economic growth and maintain financial stability. By clarifying key definitions and provisions, the revised act aims to provide a more comprehensive framework for financial governance in the country.

Impact on Financial Markets

The revised act is expected to have significant implications for financial markets, as it provides a clearer regulatory framework for commercial banks, non-bank financial institutions, and other market participants. The strengthening of the Central Bank’s role in maintaining financial stability is also likely to enhance investor confidence and promote economic growth.

Conclusion

In conclusion, the revised Central Bank Act has introduced important definitions and provisions aimed at promoting financial stability and economic growth. The act clarifies key concepts, strengthens the Central Bank’s role, and provides a more comprehensive framework for financial governance in the country. As such, it is expected to have significant implications for financial markets and contribute to the overall development of the economy.