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प्रश्न
State with reason. Whether you ‘agree’ or ‘disagree’ with the following statement:
Commercial bank can credit on the basis of primary deposit.
उत्तर
Yes, I agree with this statement:
Reasons:
The main source of funds, which is available to commercial banks, is in the form of deposits from the public.
Primary Deposits :
(i) Primary deposits are also known as cash deposits. Such deposits refer to money deposited by the people in the form of cash with the banks. These deposits are withdrawable by the depositors.
(ii) A part of these deposits are kept by the bank, to meet the demand for cash of the depositor. This is termed as minimum cash reserves. The banks are able to do with a very small reserve because all depositors do not withdraw money at the same time
(iii) When a bank grants loan to a borrower, the bank opens a deposit account in the name of the borrower and the money transferred on the account of the borrower creates secondary deposits.
(iv) When the borrower withdraws money from his loan account by a cheque, it is deposited by the payee in some other bank. Other banks again create credit on the basis of fresh deposits received after keeping the required reserves.
Thus, a commercial bank can create credit on the basis of primacy deposits.
APPEARS IN
संबंधित प्रश्न
Explain the components of Legal reserve Ratio.
Explain the process of credit creation by commercial banks.
Explain the agency function of commercial banks.
State whether the following statement is true or false :
Credit control is the function of commercial banks.
State whether the following statement is true or false:
Central bank also performs commercial banking business.
State whether the following statement is true or false.
The Cash Reserve Ratio does not affect the lending capacity of the commercial banks.
State whether the following statement is True or False with reason:
Commercial Banks cannot give interest on deposits.
Write explanatory note.
Primary functions of commercial bank.
Fill in the blank with appropriate alternatives given in the bracket :
Commercial banks create __________.
State whether the following statements are TRUE or FALSE:
Commercial banks play an important role in economic development.
Write answers in ‘one’ or ‘two’ paras each.
What are the primary functions of commercial banks?
Write explanatory notes or answer the following.
Explain the primary functions of Commercial bank.
Define or Explain the concept
Current deposit
State whether the following statements are True or False with reason:
Interest rate is more for fixed deposits.
Fill in the blank with appropriate alternatives given below
__________ is a primary function of commercial banks.
Fill in the blank with appropriate alternatives given below
Facility of E-banking is provided through __________
State whether the following statement is True or False.
There is no difference between primary deposit and secondary deposit of a commercial bank.
Give reason or explain the following statement:
Overdraft facility is provided to current account holders.
Write short note on:
Derivative deposit
Write short note on:
D-mat account
Write short note on:
Long term loans
Answer in detail:
Explain the process of credit creation.
Answer the following question.
Explain the money creation function of commercial banks.
A Commercial Bank is an institution that provides services ______.
Bank credit refers to ______.
Credit creation means.
What is credit creation?
Explain the role of Commercial Banks in economic development.
State any two components of ‘Net Factor Income from Abroad’.
CRR is ______
Which of the following points indicates that RBI is controlling the commercial banks?
The process of money creation or credit creation is done by ______
Which of the following are the functions of a commercial bank?
What role of RBI is known as 'lender of last resort'?
M4 = ______ + Total deposits with the Post Office Saving Organization (excluding National Saving Certificate).
How Public debt imposes a burden on the economy as a whole?
Demand deposits include ______
High Powered Money includes ______
Consider the following statements:
- M1 is a broad concept of money.
- M2 is a narrow concept of money.
- M3 includes both M1 and lime deposit of public with the bank.
Which of the following is true with respect to the concept of supply of money?
In the present COVID-19 situation, many economists have raised their concerns that the Indian economy may have to face a deflationary situation due to reduced economic activities in the country. Suppose you are a member of the high-powered committee constituted by the Reserve Bank of India (RBl). You have suggested that as the supervisor of commercial banks, ______ (restriction/release) of the money supply be ensured by the Reserve Bank of India (RBI).
Saving deposit in the Post office is a part of ______
In the case of Gross Domestic Capital Formation, which one will be the part of it?
Read the following hypothetical case study carefully and answer the questions follow on the basis of the same.
Agricultural Developmental Bank of Pakistan uses the production function approach for measuring bank outputs and costs. A translog cost function is estimated to provide an assessment of the bank's scale and scope efficiency, and to quantify the extent to which its production costs are sensitive to the size and output mix. Results show that the bank enjoys both overall and product-specific economies of scale and, therefore, there exists scope for the bank to expand its operations at a declining average cost. Even though bank branches in all size categories enjoy economies of scale, the extent of such economies is larger for branches operating at a smaller scale of production. This implies that as the bank branches grow larger in size in terms of both loan and deposit accounts, they move closer to attaining increasing returns to a factor. It is also shown that the marginal costs of servicing both loan and deposit accounts decline as bank branches grow larger in size in terms of either the number of loans or the number of deposits. This confirms that branches operating at a larger scale of production have attained greater cost-efficiency in terms of servicing the loan and deposit accounts.
The increasing returns to scale in larger branches is due to ______
Identify the correctly matched pair of the items in Column A to that of Column B
| Column A | Column B | ||
| 1 | Money | (a) | Supply of Money |
| 2 | Commercial Bank | (b) | Store of Value |
| 3 | Central Bank | (c) | Credit Control |
| 4 | M4 | (d) | Circulation of Money |
M3 = ______
It takes Rohan 30 minutes to do an economics assignment and one hour to do a finance assignment. What is the opportunity cost of you doing two economics assignments?
Explain the functions of commercial bank.
