Which of the following is NOT a primary function of commercial banks?

The correct answer is Transfer of funds. Key Points

• Transfer of funds is not a primary function of commercial banks, but rather a secondary function.
• The primary functions of commercial banks include creating credit, lending loans to the public, and receiving deposits from the public.
• The creation of credit involves the bank lending money to borrowers, which increases the money supply in the economy.
• Lending loans to the public includes providing various types of loans such as personal loans, home loans, and business loans.
• Receiving deposits from the public involves accepting money from individuals and businesses and holding it in accounts such as savings accounts, current accounts, and fixed deposit accounts.

Additional Information

• Transfer of funds is a secondary function of commercial banks that involves facilitating the movement of funds from one account to another, either within the same bank or between different banks.
• The creation of credit is an important function of commercial banks as it helps to stimulate economic growth by providing access to capital for businesses and individuals.
• Lending loans to the public is a key way in which commercial banks generate revenue, by charging interest on the loans they provide.
• Receiving deposits from the public is an important function of commercial banks as it provides a source of funds that can be used for lending and other activities.