BANKING AFFAIRS

Detailed explanation-1: -Answer: The primary functions of a commercial bank are accepting deposits and also lending funds. Deposits are savings, current, or time deposits. Also, a commercial bank lends funds to its customers in the form of loans and advances, cash credit, overdraft and discounting of bills, etc.

Detailed explanation-2: -The main purpose of commercial banks is to provide financial services to the general public and also provide loan facilities to the business which helps in ensuring economic stability and growth of the economy. Therefore, we can say that credit creation is the most important purpose of commercial banks.

Detailed explanation-3: -A commercial bank accepts deposits in the form of current, saving and fixed deposits. It collects the surplus balance of the individuals and firms and finances the temporary needs of commercial transactions. The first task is, therefore, the collecting of the savings of the public.

Detailed explanation-4: -Option (c) is correct. Primary function of commercial bank is to accept deposit i.e. deposit the excess money of people who have in surplus and advancing loan i.e. gave money to those who are in need of it.

Detailed explanation-5: -Facilitating import of goods is not a primary function of a bank.