Which of the following is not included in the assets of a commercial bank in India?

[UPSC Civil Services Exam – 2019 Prelims]

(a) Advances

(b) Deposits

(c) Investments

(d) Money at call and short notice

Answer: (b)        

Explanation:

• The key business of the banks is to accept different types of deposits from the public and then lend these funds to the borrowers.
• This is called Financial intermediation.
• In terms of the banks, the deposits represent the “liabilities” of the banks while loans advanced and investments made by banks represent their “assets”.
• The deposit itself is a liability owed by the bank to the depositor.
• Bank deposits refer to this liability rather than to the actual funds that have been deposited.