Commercial Banks — Important Questions
ICSE · Class 10 · Economics
42 important questions from Commercial Banks for ICSE Class 10 Economics, with answers. Written for the board exams 2027.
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Get startedImportant Questions from Commercial Banks
Which functions are performed by commercial banks? (Select all correct options)
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Accepting deposits, Advancing loans, Providing locker facilities, Transfer of funds
Commercial banks perform primary functions (accepting deposits, advancing loans), agency functions (transfer of funds), and general utility functions (locker facilities). Only the central bank issues currency.
Commercial banks help in mobilization of savings. True or False?
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True
True. Commercial banks mobilize public savings by collecting deposits from people who have surplus money and providing security. This helps in channeling idle money into productive uses.
Which of the following are agency functions of banks? (Select all correct options)
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Collection of insurance premiums, Purchase and sale of securities, Transfer of funds, Acting as trustee
Agency functions are services banks provide on behalf of customers like collecting premiums, buying/selling securities, transferring funds, and acting as trustees. Accepting deposits is a primary function.
What does credit creation by banks mean?
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Generating new money through lending activities
Credit creation refers to banks generating new money through lending. When banks grant loans, they create demand deposits (secondary deposits), thus increasing money supply in the economy.
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