Question

A bank is an institution which deals in money and credit.

• A. True
• B. False

Answer 1

The correct option is A True

True.

A bank is a financial institution which accepts deposit from people and offers loan for the purpose of consumption and investment. The main function of the banks is to create credit through the primary deposits which it receives from the public in order to provide more credit to the public. Therefore, the banks deal in money and credit where they accept money from public to generate credit in the economy.