Read the following about Commercial Banks in India.
A. Commercial banks are the other type of institutions which are a part of the money-creating system of the economy.
B. They accept deposits from the public and lend out part of these funds to those who want to borrow.
Identify the INCORRECT statement/statements.

Correct option is A

The correct answer is (a) Neither A nor B.
· Both statements A and B are correct in describing the role and function of commercial banks in India.
· Statement A: Commercial banks are indeed a crucial part of the money-creating system in the economy. They play a significant role in money supply by accepting deposits and issuing loans, which increases the money circulating in the economy.
· Statement B: Commercial banks accept deposits from the public and lend a portion of these deposits to borrowers. This lending process not only helps in fulfilling the credit needs of businesses and individuals but also contributes to economic growth.
Information Booster:
· Reserve Requirement: Commercial banks are required to keep a fraction of their deposits as reserves, known as the cash reserve ratio (CRR), which is mandated by the central bank (RBI in India).
· Types of Commercial Banks: These include public sector banks, private sector banks, and foreign banks operating in India.
· Primary Functions: The primary functions of commercial banks include accepting deposits, providing loans, facilitating payments, and offering financial advice.