MCQ Class 8] Which of the following is NOT a function of a bank? (2024)

FAQs

Which of the following is not a function of a bank answer? ›

Option (D) Selling insurance policies - Selling insurance policies is not a main function of banks. It is rather a function of insurance companies that provide protection against various risks and uncertainties.

The correct answer is: c) they are responsible for the conduct of monetary policy. Other than the central authority of the country, which is called a central bank, banks do not apply monetary policy.

Transfer of funds is not a primary function of commercial banks, but rather a secondary function. The primary functions of commercial banks include creating credit, lending loans to the public, and receiving deposits from the public.

The correct option is accepts deposits from the public. Central banks are responsible for overseeing the monetary system for a nation, along with a wide range of other responsibilities, from overseeing monetary policy to implementing specific goals such as currency stability, low inflation, and full employment.

Explanation: Accepting deposits, providing loans, mortgages, cash, borrowing, overdraft, and bill discounting are all primary responsibilities.

Although banks do many things, their primary role is to take in funds—called deposits—from those with money, pool them, and lend them to those who need funds.

All banks have to perform two major primary functions namely: Accepting of deposits. Granting of loans and advances.

Solution: Issuing currency is not the function of commercial banks. The main function of the Reserve Bank of India is to issue currency. A commercial bank is a financial institution that carries out all the operations regarding deposits, withdrawal of money, loans, and other activities.

Custodian of foreign exchange funds is not a function of a central bank. This is because the central bank is responsible for managing the country's monetary policy, which includes setting interest rates, controlling the money supply, and managing the exchange rate.

Which of the following are not functions of a financial system? ›

Answer and Explanation:

Reducing unemployment and helping speculators to bet on price movements are not functions of a financial system.

Any person resident outside India (other than a person resident in Nepal and Bhutan). Individuals / entities of Pakistan nationality / ownership, entities of Bangladesh ownership and erstwhile Overseas Corporate Bodies require prior approval of the Reserve Bank. be freely utilized for opening NRO accounts.

Facilitating import of goods is not a primary function of a bank.

Answer and Explanation:

The price mechanism is not a function of money. It is a system for setting the prices of goods and services through the interactions between sellers and buyers. Money has three main functions, and these include store of value, medium of exchange, and unit of account.

Banks create new money whenever they make loans. 97% of the money in the economy today exists as bank deposits, whilst just 3% is physical cash.

What are the four main functions of banks today? storing money, transferring money, lending money, and financial services.

Ensuring exchange rate stability: Contrary to the statement, ensuring exchange rate stability is not a function of the World Bank. Exchange rate stability refers to the stability of the value of a country's currency relative to other currencies.