What is the function of a commercial bank?

Question

Question

This question was previously asked in

Bihar Police SI Memory Based Paper (Held on: 17th Dec 2023 Shift 1)

Answer 1

The correct answer is Accepting deposits and providing funds

Key Points

A commercial bank is a financial institution which accepts deposits from the public and gives loans for consumption and investment to make profit
Examples of Commercial Banks State Bank of India (SBI), Housing Development Finance Corporation (HDFC) Bank, Industrial Credit and Investment etc.
Primary Functions of Commercial Bank refer to financial institutions that
- accept deposits,
- provide checking account services
- make loans
- advances,
- credit
- overdraft
- discounting of bills.

Additional Information

There are three main types of commercial banks:
- public sector banks,
- private banks,
- foreign banks
Secondary functions include issuing letters of credit, undertaking safe custody of valuables, providing consumer finance, educational loans, etc.
Bank Nationalization: In 1969, the Government of India nationalized 14 major private banks; one of the big banks was the Bank of India. In 1980, 6 more private banks were nationalized.

Thus, the primary function of a commercial bank is to Accept deposits.