“In the 1990s, on the advice of Reserve Bank of India (RBI), the Government of India took a decision of hypothecation of gold reserves to different…

Central Bank acts as the banker to the government. It accepts receipts and makes payments for the government, and carries out exchange, remittance and other banking operations. The Central Bank also provides short-term credit to the government, so that the government can meet any shortfalls in receipts over disbursements.As the government's banker, the Central Bank also has the responsibility of managing the public debt.As indicated in the above text, the Central Bank also advises the government on various financial, economic and monetary matters.