What is the cardholder bank responsible for?

The cardholder bank, often called the issuing bank, is primarily responsible for issuing bank cards to individuals. This role entails providing customers with credit or debit cards that enable them to access their accounts and conduct transactions. The issuing bank is also responsible for managing the cardholder's account, including setting credit limits, processing transactions, and ensuring that cardholders can safely make purchases.

While the other roles mentioned in the incorrect options are associated with different aspects of the banking and payments ecosystem, they do not accurately define the responsibilities of the cardholder bank. For instance, providing funds for transactions is a function that occurs during the transaction process but is more about the settlement between banks rather than the issuance of cards. Distributing credit to cardholders is related but is a more nuanced aspect of credit management rather than the initial issuance of the card itself. Monitoring merchant transactions typically falls under the purview of payment networks and acquiring banks, which track and facilitate transaction processing rather than the cardholder issuance process.