Advertisements
Advertisements
Question
Which is the primary function of Commercial Banks?
Options
Accepting deposits
Advancing of loans
Both accepting deposits and advancing of loans
None of these
Solution
Both accepting deposits and advancing of loans
Explanation:
The primary functions of commercial banks are;
- Accepting Deposits: Commercial banks accept deposits from the public, which can be in the form of savings, current, or fixed deposits.
- Advancing Loans: Commercial banks use the deposited funds to provide loans to individuals, businesses, and other entities.
Both functions are fundamental to the operation of commercial banks, making them equally important primary functions.
RELATED QUESTIONS
Mention two differences between fixed deposits and demand deposits.
How do commercial banks mobilise deposits from the public?
Explain two methods adopted by Commercial banks to advance loans to the general public.
What are current accounts?
Explain the features of savings bank account.
Distinguish between fixed deposit and demand deposit. (Any two)
Commercial banks accept deposits, lend money and provide other services.
What are time (or fixed) deposits?
What are current deposits?
Why are commercial banks called producers (creators) of money? Explain.
