Question

Which of the following statements is true or false?

a) In unit banking, each commercial bank is a very large institution.
b) Under mixed banking system, commercial banks make both short-term as well as long-term loans.

• A. Both (a) and (b) are true
• B. Both (a) and (b) are false
• C. (a) is true but (b) is false
• D. (a) is false, (b) is true

Answer 1

Answer: (D)

(a) is false, (b) is true

Unit banking are single and usually small banks without other bank branches, unit banking system serves the local community.

Mixed banking system is the combination of deposit banking and investment banking system. Hence, in mix banking systems, commercial banks can make both long and short term loans.