Civil Services Prep

Prelims 2019 · Economy · Question 14

Which of the following is not included in the assets of a commercial bank in India?

  1. Advances
  2. Deposits
  3. Investments
  4. Money at call and short notice

Answer

Deposits

  • (a) Advances: Loans and advances made by a bank are assets because they generate income and are receivable from borrowers. Verdict: Included in assets.
  • (b) Deposits: Deposits are amounts owed by the bank to customers, so they are liabilities, not assets. Verdict: Not included in assets.
  • (c) Investments: Government securities and other investments held by banks are part of their assets. Verdict: Included in assets.
  • (d) Money at call and short notice: These are very short-term funds lent by a bank and hence appear as assets. Verdict: Included in assets.

Correct answer: (b) Deposits.

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