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Functions of Bank

If a person i...

Question

If a person is involved in a business of export and import of goods from different parts of the world, which of the following functions of a bank is helpful in his business transactions?

A

Letter of credit

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B

Bank guarantee

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C

Locker facility

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D

Foreign exchange transaction

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Solution

The correct option is D Foreign exchange transaction
Banks provide a promise to step in in case a debtor fails to pay a committed amount through letters of credit and bank guarentees. If a person has an import and export buisness of goods, a letter of credit would help. Another important function would be foreign exchange transactions.

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