What is the main source of income for commercial banks?

Correct option is D

The correct answer is (d) interest earned on loans and advances.
· Commercial banks primarily earn their income from the interest charged on the loans and advances they provide to customers.
· When individuals, businesses, or other entities borrow money from a bank, they are required to pay interest on the principal amount borrowed.
· This interest income constitutes a significant portion of a bank's revenue stream.
· Additionally, banks may also earn income from fees and commissions charged for various services, such as account maintenance fees, transaction charges, and investment advisory services.
Facts to remember:
· Scheduled commercial banks are those that are included in the Second Schedule of the Reserve Bank of India (RBI) Act, 1934, and are eligible for loans from the RBI.
· These banks play a crucial role in mobilizing savings, providing credit, and facilitating economic growth and development in India.