Question

A bank is a ______ which collects money from the public in the form of deposits and lends the same to the borrowers.

Options

• company

• Reserve bank

• government organisation

• Lender of the last resort

Answer 1

A bank is a company which collects money from the public in the form of deposits and lends the same to the borrowers.

Explanation:

A commercial bank is legally established as a company or financial corporate venture whose primary function is to trade money by accepting public deposits and lending those funds as lucrative loans. While it follows tight Reserve Bank (central bank) standards and can be publicly or privately owned, its primary corporate identity is that of a banking company.