Which among the following are the functions of a bank?

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Accepting deposits from depositors

Giving out loans to borrowers

Both 1 & 2

None of these

answer is C.

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Detailed Solution

The main function of a bank includes both accepting deposits from depositors and giving out loans to borrowers.
Banks give some interest to depositors on their deposits whereas it charges some interest from borrowers which is always higher than it is given to depositors. The difference between those interests is the profit for the commercial banks. Banks circulate portions of money that are deposited in their banks to borrowers in the market by giving out loans for various reasons and periods. To attract more deposits, it offers many different types of deposit accounts like saving accounts, current accounts, fixed deposits, etc.

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