BANKING AFFAIRS

Detailed explanation-1: -A commercial bank is a dealer of credit. It creates money based on cash deposits. Further, it issues new money through its loan operations and creates credit or expands the monetary base of a country.

Detailed explanation-2: -All commercial banks create credit by advancing loans and purchasing securities. They lend money to the individuals as well as to the businesses out of deposits accepted from the public. Commercial banks are not allowed to use the entire amount of public deposits for lending purposes.

Detailed explanation-3: -Commercial bank creates credit.

Detailed explanation-4: -Commercial credit is an on-demand loan credit facility pre-approved by the bank or the lender and availed usually for urgent cash or working capital needs.

Detailed explanation-5: -Examples of commercial banks – ICICI Bank, State Bank of India, Axis Bank, and HDFC Bank.