Financial Awareness - Risk, Stability & Emerging Finance
Which of the following best defines a bank as per the Reserve Bank of India?
Which of the following best defines a bank as per the Reserve Bank of India?
easy Q2 of 15
Step-by-Step Solution
Step 1: Recall RBI's definition of a bank
The RBI defines a bank as an institution that accepts deposits and creates credit.Step 2: Evaluate other options
Companies providing loans without deposits are NBFCs, issuing government bonds is a government function, and dealing only in foreign exchange is a limited banking activity.Final Answer:
An institution that accepts deposits and creates credit → Option AQuick Check:
Bank definition by RBI = accepts deposits and creates credit ✅
Quick Trick: Focus on deposits and credit creation for bank definition.
Common Mistakes:
- Mistaking NBFCs or government functions as banks.
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