Advertisements
Advertisements
Question
Which of the following is a function of a commercial bank? Give a reason to support your answer:
Options
Acting as a lender of the last resort.
Deciding what is legal tender.
Determining monetary policy.
Provide cash credit facility.
Solution
Provide cash credit facility.
Reason:
A commercial bank is responsible for providing cash credit facilities. Commercial banks provide cash credit as part of their lending services, allowing firms to withdraw funds as needed up to a predetermined credit limit. This helps to meet short-term cash needs or working capital requirements.
APPEARS IN
RELATED QUESTIONS
Define a commercial bank.
What are term/time deposits?
What are current accounts?
______ is a revolving credit arrangement.
Mention any two agency functions/services of a commercial bank.
Which of the following is not the function of commercial bank?
Which of the following statements are true?
- A bank collects money from those who have surplus funds and lends this money to those who require it.
- Commercial banks do not transfer funds from one place to another.
- The principle objective of commercial banks is to earn profit.
Which of these are known as term/time deposits?
Give two advantages of depositing money with commercial banks.
What are saving bank accounts?
