UPSC Prelims 2010 · General Studies
Question 142: Economy and Social Development
Consider the following statements : The functions of commercial banks in India include
- 1.Purchase and sale of shares and securities on behalf of customers.
- 2.Acting as executors and trustees of wills.
Which of the statements given above is/are correct ?
AnswerThe answer is (c).
Commercial banks do more than accept deposits and lend. Under agency services they buy and sell shares and securities on behalf of customers, and they act as executors and trustees of wills and estates, in addition to collecting cheques and paying bills. Both functions listed are therefore among their functions. Remember: banks' agency functions include securities transactions for clients and executor and trustee services.
- 1. Banks buy and sell shares and securities for customers as agents.
- 2. Banks act as executors and trustees of wills.
How you could have got this
- If you were sure statement 1 is correct, (b) and (d) go: each of them leaves 1 out.
What you needed to know: Banks buy and sell shares and securities for customers as agents.
- Then, if you were sure statement 2 is correct, (a) goes: it leaves 2 out.
What you needed to know: Banks act as executors and trustees of wills.
Only (c) is left. This one needs every statement.
This follows an unofficial answer: UPSC has not published its key for this year, and if that answer is wrong, so is this path.
Which options go is worked out from UPSC’s key and the options, not by a model.
Why each option is right or wrong
- (a) Executor and trustee services are also a function.
- (b) Buying and selling securities for clients is also a function.
- (c) Right: both are functions of commercial banks.
- (d) Both are functions, so 'neither' is wrong.
Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2010, General Studies, Series A. The paper on upsc.gov.in.