Question

In the question given below, there are two statement marked as assertion and reason Read the statement and choose correct option
Assertion (A) Not all the money that deposited in the banks by the depositors is kept by the bank themselves
Reason (R) They use it to extend loans so that the difference between interest earned and interest gain becomes a source of income
Options:
both A and R true and R is the correct explanation of A
Both A and R true but R is not the correct explanation of A
A is correct but R is wrong
A is wrong but R is correct
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Answer 1

Answer:

A is correct R is worng ~ answer

Answer 2

Answer:

The correct answer is

A is Wrong but R is correct

Explanation:

• Banks keep small proportion of their deposits as cash with themselves. this could be usually 15% of their deposits as cash. This amount is kept as a Amenities to pay the depositors who may come to withdraw the cash on any day. This amount is enough because only alittle fraction of people come to withdraw money on a given day.
• The rest of the amount is used by the banks to relinquish money on credit to people who need the credit. A bank charges interest on the loan which it and to its creditors. the speed of interest charged by a bank with no loans is over the speed given by it on deposits. Thus, interest is that the most source of income for banks.

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