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Banks are financial institutions that can make or break an economy. Unsupervised and uncontrolled behavior from banks can spell doom to the economy and for the customers as well. Hence central banks like the Reserve Bank in India or the Federal Reserve in USA monitor the functioning of all banks in their jurisdiction and ensure that they function in a just fashion and customers stand to benefit at all times.

Each country has a central bank that supervises the banks that operate in that country. In India it is the Reserve Bank of India.

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Q: Why do central banks play an impoirtant role in the international banking system?
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