What is the primary function of a commercial bank?

Correct option is C

The correct answer is (c) Granting loans and accepting deposits.
· The primary function of a commercial bank, granting loans and accepting deposits, is fundamental to the functioning of the financial system and the economy as a whole.
· Commercial banks primarily accept deposits and provide lending services to customers, including savings, current, and time deposits, as well as loans, advances, cash credit, overdrafts, and bill discounting.
· Additionally, they undertake secondary functions such as issuing letters of credit, safeguarding assets, offering consumer financing, providing educational loans, and facilitating checking account services.
· These functions support capital formation, financial inclusion, business expansion, economic stability, and overall economic growth.
· Commercial banks play a pivotal role in allocating resources, promoting investment, and facilitating economic transactions, making them indispensable institutions in modern economies.