Select the major principles which banks strive to incorporate in their working from the following : (a) Profitability (b) Labour welfare (c) Social welfare (d) Safety (e) HRD (f) Liquidity Codes :
(a), (c), (d), (f)
A commercial bank works with depositors' money, so its lending and investment policy rests on a few guiding principles.
(a) Profitability: a bank is a commercial enterprise and must earn enough to pay interest to depositors, meet costs and reward shareholders. This is a major principle.
(d) Safety: the funds lent belong to depositors, so the bank must lend against sound security to borrowers able to repay. This is a major principle.
(f) Liquidity: deposits are repayable on demand, so the bank must hold enough cash and liquid assets to meet withdrawals. This is a major principle; liquidity and profitability must be balanced.
(c) Social welfare: especially in India after nationalisation, banks are expected to serve national priorities such as priority-sector lending and financial inclusion, so social welfare is treated as a guiding principle of banking.
(b) Labour welfare and (e) HRD are internal management concerns of any organisation, not the principles that govern a bank's employment of funds.
Hence, (a), (c), (d), (f).
Similar Questions
Match the items of List - I with List - II in terms of functions of a bank :
List - I List - II (Activities) (Functions) (a) Underwriting (i) Primary Functions (b) Transfer of funds (ii) Granting Advances (c) Overdraft (iii) Utility Functions (d) Recurring Deposits (iv) Agency Functions Codes :
(a) (b) (c) (d)
Interest earned by a depositor against a deposit with a commercial bank for custodial service :
Assertion (A) : Taking of deposits and granting of loans single out banks.
Reasoning (R) : Banks act as intermediaries when they mobilize savings from surplus units to shortage units in order to finance productive activities.
Codes :
The profitability of public-sector banks is low due to
(i) Over-cautions approach to lending
(ii) Reserve Bank Policies
(iii) High Overhead Costs
(iv) Social-sector lending
Identify the correct code :
Codes :
According to the recent guidelines (2013) of the Reserve Bank of India the Private Sector Banks are required to have a minimum paid up equity capital of
According to the FDI Policy of the Government of India (2012), the FDI in banks is limited to
Match the items of List – I with List – II :
List – I List – II a. RBI Nationalization i. 1964 b. Imperial Bank Nationalization ii. 1949 c. Nationalization of 14 Commercial Banks iii. 1955 d. Establishment of IDBI iv. 1969 Identify the correct combination :
Codes :
a b c d
Important Questions from Commercial Banks
Which of the following banks is the largest commercial bank in India?
Which one of the following is a primary function of commercial banks?
Which of the following is/are function(s) of a commercial bank?
- Accepting deposits
- Giving loans
- Payments and settlements
Imposition of price _______ below the equilibrium price leads to excess _______.
- Which of the following are liabilities of commercial banks ?
I. Capital and reserves
II. Cash and balances with RBI
III. Investments
IV. Borrowings
Codes :
