The bank type responsible for the formulation of rules and regulations guiding the banking industry is known as?

A. Commercial bank
B. Central bank
C. Mortgage bank
D. Merchant bank

Correct Answer:

Option B – Central bank

Explanation

Central bank is the highest financial institution in a country which carries out the monetary policy of the government. The central bank controls, regulate and supervise the components of the banking system. It lays down rules and regulation to be followed by all banks to ensure smooth operation.