_______ is a primary function of commercial banks.

Purchasing and selling securities

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Accepting deposits

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Safe deposit vault

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Letters of credit

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Solution

The correct option is A Accepting deposits
A commercial bank is that financial institution whose primary function is to accept deposit in all denominations from the 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 the bank receives from the public in order to provide more credit to the public.

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Similar questions

Q. Accepting deposits is the only primary function of commercial banks.

Q. Fill in the blanks with appropriate alternatives given in the brackets.

1. Deposits from __________ account can be withdrawn without any notice. (saving/current/fixed/recurring)
2. __________ is a primary function of commercial banks. (Purchasing and selling securities/ Accepting deposits/ Safe deposit vault / Letter of credit)
3. Every loan creates a __________. (credit/ deposit/ profit/ loss)
4. Facility of E-banking is provided through __________ (telephone/ debit cards/ internet/ credit cards)

A commercial bank is a financial institution which performs the functions of accepting deposits from the general public and giving loans for investment with the aim of earning profits.

Q. State with reasons whether you agree or disagree with the following statements.
1. A commercial bank create credit on the basis of primary deposit.
2. Commercial banks perform many general utility services.

Q. State whether the following statements are True or False.
1. Commercial banks are the backbone of modern economy.
2. The saving bank deposit can be opened with a small amount.
3. Credit money is created by the central bank of a country.
4. There is no difference between primary deposit and secondary deposit of a commercial bank.

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