Chap#02 Q4 Commercial Bank

Commercial banks create credit:

• By Discounting of Bill

• By Investment

• By Advancing Loan

• All of these

Credit money in the country is controlled by

• Central Bank

• Commercial Bank

• Saving Bank

• Agriculture Bank

Which bank accepts the deposits from public?

• Central Bank

• Commercial Bank

•   Both A and B

• All of theses

Commercial bank is a financial adviser of its __________________________________

• State Bank

• Non Schedule Banks

• other Financial Instittions

• Account Holder

For the process of credit creation all the deposits (liabilities) of the bank are in the form of _____________

• Demand deposits

• Time deposits

• Saving deposits

• Foreign currency deposits

Which of the following functions are performed by commercial banks?

• Issuance of currency notes

• Credit creation

• Re discounting of bills

• Preparation of monetary policy

Which of the following is NOT a function of the commercial banks?

• Receiving deposits

• Issuing Loans

• Re discounting of Bill

• Safe custody of valuables

The part of deposits kept with the central bank is called

• Margin

• Interest Rate

• Cash Reserve

• All of these

The primary function of a commercial bank is:

• Accepting deposits

• Advancing loans

• Transacting foreign exchange

• Advice to customers

Which of the following statements is alike “loan creates deposit?”

• Bank creates credit

• Deposits create loan

• Credit creates loan

• Credit creates deposits