Chapter 1 Class 8 Economics - Introduction to Banks

Which of the following is NOT a function of a bank?


A. Accepting deposits

B. Lending of funds

C. Providing cheque facilities

D. Selling insurance policies



Answer by Student

So, the correct answer is option (D): selling insurance policies .

Detailed Explanation by Teachoo

Let’s check all the options and see why they are correct or not:

  • Option (A) Accepting deposits - Accepting deposits is one of the main functions of banks  because it helps them to mobilize the savings of the people and provide them with interest and security. So, this is incorrect .

  • Option (B) Lending of funds - Lending of funds is another main function of banks because it helps them to earn income from interest and fees and also to support the economic development and growth of the country. So, this is incorrect .

  • Option (C) Providing cheque facilities - Providing cheque facilities is also a main function of banks  because it helps them to facilitate the smooth and convenient transactions of money among the customers and also to reduce the risk of theft or loss of cash. So, this is incorrect .

  • 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. Some banks may sell insurance policies as a part of their additional services, but it is not their core function. So, this is correct .

Thus, option (D) is correct .

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Davneet Singh has done his B.Tech from Indian Institute of Technology, Kanpur. He has been teaching from the past 14 years. He provides courses for Maths, Science, Social Science, Physics, Chemistry, Computer Science at Teachoo.