Which of the following is NOT a function of commercial banks?

The correct answer is - Issuing currency

Key Points

• Issuing currency
  • Issuing currency is the responsibility of the central bank of a country, such as the Reserve Bank of India (RBI) in India or the Federal Reserve in the United States.
  • Commercial banks do not have the authority to issue currency; their role is to facilitate financial transactions, accept deposits, and provide loans.
  • The central bank ensures the stability and integrity of the currency system, manages monetary policy, and regulates the banking sector.

Additional Information

• Granting loans
  • Commercial banks provide various types of loans to individuals, businesses, and other entities to facilitate economic growth and meet financial needs.
  • Loans can include personal loans, home loans, business loans, and more.
• Accepting deposits
  • Commercial banks accept deposits from the public, providing a safe place for individuals and organizations to store their money.
  • Deposits can be in the form of savings accounts, current accounts, fixed deposits, and recurring deposits.
• Facilitating digital transactions
  • Commercial banks enable digital transactions such as online banking, mobile banking, and electronic funds transfers, making financial operations more convenient and efficient.
  • They play a crucial role in the modernization of the payment system by providing various digital payment solutions.