Question : The primary function of commercial banks is ___________.
Option 1: Issuing currency notes
Option 2: Granting loans and advances
Option 3: Controlling monetary policy
Option 4: Managing government finances
Correct Answer: Granting loans and advances
Solution : The correct answer is (b) Granting loans and advances.
The primary function of commercial banks is to accept deposits from individuals and businesses and grant loans and advances to borrowers. Commercial banks act as intermediaries between depositors who have excess funds and borrowers who require funds for various purposes, such as starting a business, purchasing a home, or financing their operations. By granting loans and advances, commercial banks play a crucial role in providing credit and facilitating economic activities. While commercial banks may play a role in implementing monetary policy set by the central bank, controlling monetary policy is primarily the responsibility of the central bank itself. Managing government finances is typically carried out by specialized institutions such as central banks or treasury departments, rather than commercial banks.
Question : Which of the following is not a function of commercial banks?
Option 1: Accepting deposits
Option 2: Granting loans
Option 3: Issuing currency notes
Option 4: Providing remittance services
Question : Which of the following is not a function of the commercial banks?
Option 2: Accepting deposits
Option 3: Lending money
Option 4: Providing financial advice
Question : Which of the following is not a function of the RBI?
Option 1: Regulating the banking system
Option 2: Conducting monetary policy
Option 4: Regulating the stock market
Option 2: Regulating the banking system
Option 3: Conducting monetary policy
Question : Which of the following is a function of the Reserve Bank of India (RBI)?
Option 1: Formulating monetary policy
Option 2: Issuing currency notes
Option 3: Regulating and supervising the functioning of banks
Option 4: All of the above
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