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Commercial Banks

ICSE · Class 10 · Economics

Quick revision notes for Commercial Banks — ICSE Class 10 Economics. Key concepts, formulas, and definitions for last-minute revision.

42 questions38 flashcards5 concepts

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An illustration depicting the 'Lala the Goldsmith' story to explain how commercial banks create credit by lending out a portion of deposits, leading to an increase in the money supply.
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Key Topics to Revise

1

Meaning and Importance of Commercial Banks

  • A commercial bank accepts deposits from the public and gives loans for consumption and investment to earn profit.
  • Banks earn profit from the difference between the interest paid to depositors and the interest charged from borrowers.
  • Commercial banks help in mobilising savings by collecting surplus money from people and keeping it safe.
2

Primary Functions: Accepting Deposits

  • The primary functions of commercial banks are accepting deposits and advancing loans.
  • Banks accept mainly three types of deposits: current deposits, savings deposits, and fixed deposits.
  • Current deposits are non-interest bearing accounts used by businessmen for daily transactions.
3

Primary Functions: Advancing of Loans

  • Banks give loans and advances to businessmen, farmers, consumers, and employers against approved securities.
  • Approved securities include gold, silver, bullion, government securities, and marketable goods or stocks.
  • Cash credit allows the borrower to withdraw up to a certain limit against current assets.
4

General Utility and Agency Functions

  • Commercial banks perform three main groups of functions: primary functions, agency functions, and general utility functions.
  • Agency functions include collection and making payments for credit instruments, purchase and sale of securities, trustee and executor services, and transfer of funds.
  • General utility functions include locker facility, cheque system, letter of credit, transportation of goods, underwriting of securities, collection of statistics, and foreign exchange business.

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Full Notes

Key Concepts

A commercial bank is a financialThe two primary functions are acceptingCurrent deposits are nonCommercial banks give cash creditBanks act on behalf of customers

Frequently Asked Questions

What are the important topics in Commercial Banks for ICSE Class 10 Economics?
Commercial Banks covers several key topics that are frequently asked in ICSE Class 10 board exams. Focus on the core concepts listed on this page and practise related questions to build confidence.
How to score full marks in Commercial Banks — ICSE Class 10 Economics?
Understand the core concepts first, then work through the 42 practice questions available for this chapter. Revise formulas and definitions regularly, and use flashcards for quick recall before the exam.

Sources & Official References

Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.

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