Which of the following statements are correct?

  1. Banks keep a small portion of their deposit as cash to meet the loan requirement of the people.
  2. Banks charge a higher interest rate on loans than what they offer on deposits. 
  3. The difference between what is charged from borrowers and what is paid to  depositors is their main source of income.
  4. The RBI monitors the banks about maintaining cash balances with them.

Options:

  1. I and II are true
  2. Only I is true
  3. II, III and IV are true
  4. II and IV are true

 

Answer :

So the correct answer is (c) - II, III and IV are true.

Explanation

Let’s check all the statements

  • Statement I - Banks keep a small portion of their deposit as cash to meet the loan requirement of the people which is false .
  • Statement II - Banks charge a higher interest rate on loans than what they offer on deposits which is true .
  • Statement III - The difference between what is charged from borrowers and what is paid to  depositors is their main source of income which is true .
  • Statement IV - The RBI monitors the banks about maintaining cash balances with them which is true .

Thus, option ‘c’ is correct.

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Davneet Singh

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.