Official Answer Key & Detailed Solution
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Correct Answer: Option (B) — Deposits
Concept & Option Breakdown
Standard Reference VerifiedFor a commercial bank:
- Assets represent the uses of funds that earn returns or can be claimed by the bank (e.g., Advances/Loans extended, Investments in government securities, Cash reserves, Money at Call and Short Notice).
- Liabilities represent obligations that the bank owes to its customers and depositors. Demand and time deposits placed by the public are liabilities of the bank.
Deposits represent money borrowed from the public that the bank must repay upon demand or maturity, making them liabilities, not assets.
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