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प्रश्न
Write explanatory note.
Primary functions of commercial bank.
उत्तर
The following are some of the functions performed by commercial banks:
i. Acceptance of Deposits- Accepting deposits from the general public is the basic function of a commercial bank. There are various kinds of public deposits such as fixed account deposit, savings account deposit and current account deposits through which the commercial banks deposit the money from the public.
ii. Discounting Bills of Exchange- The commercial banks provide financial assistance to the business community by discounting bills of exchange. A bill of exchange is a document that acknowledges the amount of money that is owed by the debtors as against the goods and services received by him. The banks purchase these bills produced by the customers (after deducting interest on the face-value of the bill). In this sense, by purchasing the bills they provide easy means of finance to the business community as and when required.
iii. Credit Creation- The commercial banks create credit in the economy through demand deposits. Credit creation paves the path for the growth of the economy.
iv. Investment of Funds- Apart from granting loans and advances, the banks also invest their surplus funds in securities. Investment in the securities helps the commercial banks to meet their future requirement of funds. The banks can borrow from the RBI against such securities. Also, if required the banks can sell their securities in the open market to meet their requirement of funds.
APPEARS IN
संबंधित प्रश्न
Accepting deposits from the public is the................................. function of Commercial Bank.
(secondary / general / primary / incidental)
Explain different types of loans and advances provided by commercial banks.
Explain, with reason, whether you Agree or Disagree with the following statement.
Commercial banks provide many general utility services.
How do commercial banks create deposits? Explain.
Explain the process of money creation by the commercial banks with the help of a numerical example.
State whether the following statement is true or false :
Credit control is the function of commercial banks.
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 bank can credit on the basis of primary deposit.
Give reason or explain the following statement:
Rate of interest on fixed deposit is high.
Write short note on :
Credit Creation.
Explain with reason, whether you agree or disagree with the following statement:
Commercial banks perform agency functions to earn profit.
Write answers in ‘one’ or ‘two’ paras each.
What are the primary functions of commercial banks?
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.
Distinguish between:
Central Bank and Commercial Bank
Fill in the blank with appropriate alternatives given below
Every loan creates a __________.
Match the following:
| Group A | Group B |
| 1. D-mat account | a. Current account |
| 2. Over draft facility | b. Agency function |
| 3. ATM facility | c. Share brokers |
| 4. Commercial bank | d. General function |
| 5. Credit creation | e. Recurring account |
| f. Profit making | |
| g. Central bank | |
| h. Commercial bank |
State whether the following statement is True or False.
Commercial banks are the backbone of modern economy.
Give reason or explain the following statement:
Commercial banks provide agency functions to earn profits.
Distinguish between:
Current account and saving account
Write short note on:
Derivative deposit
Write short note on:
E-banking facility
Write short note on:
Long term loans
Answer the following question:
Explain various types of deposits.
State with reason whether you agree or disagree with the following statement.
A commercial bank create credit on the basis of primary deposit.
Answer in detail:
What are the secondary functions of commercial banks?
State whether the following statement is True or False :
Loans given by banks for a period of less than five years is known as long - term loan.
A Commercial Bank is an institution that provides services ______.
The Functions of commercial banks are broadly classified into ______.
Define Commercial banks.
Write the mechanism of credit creation by commercial banks.
Explain the role of Commercial Banks in economic development.
Which of the following points indicates that RBI is controlling the commercial banks?
Which of the following points states that the open market operation helps in controlling credit creation?
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).
If reserve ratio is 10% and primary deposit is ₹1,250 crores, the total deposit created by commercial banks will be ______
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?
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?
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 |
Railways is an example of:
The Narrow concept of money includes ______
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?
_________ is an institution that accept deposits for lending purposes.
