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Primary Functions of a Bank

Which of the ...

Question

Which of the following is not the function of commercial banks?

A

To accept deposits

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B

To offer loans

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C

To create credit

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D

To fix CRR

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Solution

The correct option is D
To fix CRR

Fixing the value of CRR is not a function of the RBI.

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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 Deposits from __________ account can be withdrawn without any notice.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)

Q. Loans offered by commercial banks are equal to deposits received by them.

Q. Through the process of _____________ commercial banks are able to create credit, which is in far excess of the initial deposits.

Q. Give Reason Or Explain the following statements.
Every loan creates a deposit or commercial banks can create deposits through loan.

Q. Commercial banks can create credit on the basis of primary deposit. Explain.

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