Question

Which is the primary function of Commercial Banks?

Options

• Accepting deposits 

• Advancing of loans

• Both accepting deposits and advancing of loans

• None of these

Answer 1

Both accepting deposits and advancing of loans

Explanation:

The primary functions of commercial banks are;

1. Accepting Deposits: Commercial banks accept deposits from the public, which can be in the form of savings, current, or fixed deposits.
2. Advancing Loans: Commercial banks use the deposited funds to provide loans to individuals, businesses, and other entities.

Both functions are fundamental to the operation of commercial banks, making them equally important primary functions.