Which of these conditions is needed for a financial institution to become a bank?
Which of these conditions is needed for a financial institution to become a bank?
(a) Accepting deposits
(b) Advancing Loans
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Anurag Pathak Changed status to publish December 30, 2023
Ans – (c)
Explanation:-
Conditions for a Financial Institution to become a Bank:
The main function of commercial banks is to accept deposits and advance loans. A financial institution can be a banking institution only when it performs both the functions of ‘Accepting Deposits’ and ‘Advancing Loans’.
For Example:-
LIC is not a bank as it does not accept chequeable deposits from the public although it performs the function of lending money.
Anurag Pathak Changed status to publish December 30, 2023
