Correct Option: C. Issuing bank-notes Detailed Explanation: In Nigeria, the Central Bank of Nigeria (CBN) is the primary monetary authority responsible for regulating the country's financial system. One of its key functions is the issuance of banknotes, which is a critical aspect of its role in maintaining monetary stability and confidence in the currency.

1. Understanding the Role of the Central Bank:
2. The Central Bank is tasked with formulating and implementing monetary policy, managing foreign reserves, and ensuring the stability of the financial system. A significant part of this responsibility includes controlling the supply of money in the economy, which is done through the issuance of currency.
3. Issuing Bank-Notes:
4. The CBN has the exclusive authority to issue banknotes in Nigeria. This means that no other financial institution, including commercial banks, can print or issue currency. The banknotes serve as legal tender for transactions within the country, and their issuance is regulated to prevent counterfeiting and ensure trust in the currency.
5. Importance of Issuing Bank-Notes:
6. By controlling the issuance of banknotes, the Central Bank can influence inflation, interest rates, and overall economic activity. For example, if the Central Bank decides to increase the money supply by issuing more banknotes, it can stimulate economic activity. Conversely, reducing the money supply can help control inflation.

Why the Other Options are Incorrect:

• A. Accepting deposits:
• While banks in Nigeria do accept deposits from customers, this function is not exclusive to the Central Bank. Commercial banks, microfinance banks, and other financial institutions also accept deposits. Therefore, this function is not reserved for the Central Bank.
• B. Serving as agents for payments:
• Similar to accepting deposits, serving as agents for payments is a function performed by various financial institutions, including commercial banks and payment service providers. The Central Bank does facilitate interbank payments and settlements, but it does not exclusively serve as the agent for all payments in the economy.
• D. Lending to customers:
• Lending to customers is primarily the role of commercial banks and other financial institutions. While the Central Bank does provide loans to commercial banks (often referred to as the lender of last resort), it does not directly lend to individual customers or businesses. Thus, this function is not reserved for the Central Bank.

Summary of Key Points:

• The Central Bank of Nigeria is the only institution authorized to issue banknotes, ensuring control over the money supply.
• Other functions like accepting deposits, serving as agents for payments, and lending to customers are performed by commercial banks and other financial institutions.
• The issuance of banknotes is crucial for maintaining monetary stability and public confidence in the currency.
• Understanding the distinct roles of the Central Bank versus commercial banks is essential for grasping the structure of the financial system in Nigeria.