Question

Commercial banks are the backbone of modern economy.

• A. True
• B. False

Answer 1

The correct option is A True

A commercial bank is that financial institution which accepts deposit from people and offers loan for the purpose of consumption or investment. The main function of commercial bank is to create credit through the primary deposits which it receives from the public in order to provide more credit to the public. Due to this function of commercial bank, they are said to be the backbone of modern economy as they provide various banking facilities without physically creating money.