Question
Download Solution PDFRead the following about Commercial Banks in India.
A. Commercial banks are the other type of institutions which are a part of the money-creating system of the economy.
B. They accept deposits from the public and lend out part of these funds to those who want to borrow.
Identify the INCORRECT statement/statements.
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFKey Points
- Option 1 is the correct answer because both statements A and B are correct.
- Statement A correctly identifies commercial banks as part of the money-creating system of the economy.
- Statement B accurately describes the primary functions of commercial banks, which include accepting deposits from the public and lending out funds to borrowers.
Additional Information
- Commercial banks play a crucial role in the economy by providing financial services that facilitate economic activities.
- They help in the mobilization of savings by accepting deposits and channeling those funds into productive uses through loans and advances.
- Commercial banks also provide various other services such as payment and settlement services, foreign exchange transactions, and investment services.
- These institutions are regulated by the Reserve Bank of India (RBI) to ensure their stability and the overall health of the financial system.
Last updated on Jul 8, 2025
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