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प्रश्न
State with reason whether you agree or disagree with the following statement.
A commercial bank create credit on the basis of primary deposit.
उत्तर
No, we disagree with the given statement. Commercial banks can create credit only out of derivative deposits. Derivative deposit is the amount of deposits left after deducting the cash reserve from primary deposits. Suppose bank A receives a total deposit of Rs.10, 000, with mandatory cash reserve of 10%, then after keeping a sum of Rs.1000, he can loan out the remaining Rs. 9000 to others. Suppose, he gave the credit to a person who deposits it in bank B. Bank B also kept 10% of Rs. 9000 i.e. it kept Rs. 900 as a reserve and loaned out the remaining sum (Rs. 8100) to an individual who deposits it in bank C. Bank C further loaned out Rs. 7290, after keeping Rs. 810 as reserve. In this way, it can go on an infinite number of times and the credit goes on being created. Hence, we can say that the commercial bank creates credit from the derivative deposit and not from the primary deposits.
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संबंधित प्रश्न
Accepting deposits from the public is the................................. function of Commercial Bank.
(secondary / general / primary / incidental)
Explain the process of credit creation by commercial banks.
Explain the various types of deposits.
Explain, with reason, whether you Agree or Disagree with the following statement.
Commercial banks provide many general utility services.
Fill in the blank using proper alternatives given in the bracket:
............................... is a primary function of commercial bank.
State whether the following statement is true or false :
Credit control is the function of commercial banks.
Distinguish between the following :
Quantitative and Qualitative measures of credit control.
State with reason. Whether you ‘agree’ or ‘disagree’ with the following statement:
Commercial bank can credit on the basis of primary deposit.
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?
Distinguish between:
Central Bank and Commercial Bank
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.
Commercial banks are the backbone of modern economy.
State whether the following statement is True or False.
The saving bank deposit can be opened with a small amount.
Define explain the following concept.
Cash credit
Give reason or explain the following statement:
Overdraft facility is provided to current account holders.
Give reason or explain the following statement:
Rate of interest on fixed deposit is high.
Distinguish between:
Cash credit and overdraft facility
Write short note on:
Derivative deposit
Write short note on:
E-banking facility
Write short note on:
D-mat account
Write short note on:
Long term loans
Answer the following question:
What are the different types of loans provided by commercial banks?
State with reason whether you agree or disagree with the following statement.
Commercial banks perform many general utility services.
Answer in detail:
What are the secondary functions of commercial banks?
A Commercial Bank is an institution that provides services ______.
Bank credit refers to ______.
Define Commercial banks.
Explain the role of Commercial Banks in economic development.
The process of money creation or credit creation is done by ______
Which of the following points states that the open market operation helps in controlling credit creation?
What is the effect of a rise in the rate of SLR on the creation of credit?
What role of RBI is known as 'lender of last resort'?
Which of the following are the agency functions of commercial banks?
M3 and M4 are known as ______ money.
Demand deposits include ______
High Powered Money includes ______
Kalpana said that Commercial Bank is the controller of credit. Geeta said that the Central Bank is the controller of credit. Bobby said that both the commercial bank and the Central Bank are the controller of credit. Who among them is not correct?
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?
Commercial Bank was facing a financial crisis due to the crisis of non-performing assets. It went to the RBI for help. What role will RBI play in such a case?
Railways is an example of:
M3 = ______
_________ is an institution that accept deposits for lending purposes.
