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Q64 (IAS/2019) Economy › Money, Banking & Inflation › Banking operations services Official Key

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

Result
Your answer: —  ·  Correct: B
Explanation

The correct answer is option B - Deposits.

Loans and advances given by banks are 'assets' for them[1], making option A incorrect. For a bank, Assets = Reserves + Loans[2], which confirms that advances (loans) are assets. Banks' assets include money at call and short notice, investments, advances, fixed assets[3] and other assets, which eliminates options A, C, and D.

However, deposits are liabilities for banks, not assets. Deposits of Public[4] appear on the liability side of a bank's balance sheet. When customers deposit money in a bank, the bank owes that money back to the depositors, making it a liability. Conversely, deposits we keep with banks are our assets, they can be withdrawn by us[2] - meaning deposits are assets for the depositor but liabilities for the bank.

Therefore, deposits are not included in the assets of a commercial bank; they are liabilities.

Sources
  1. [1] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 3: Money and Banking - Part II > 3.6 Categorization of Loans > p. 134
  2. [2] Macroeconomics (NCERT class XII 2025 ed.) > Chapter 3: Money and Banking > 3.3 MONEY CREATION BY BANKING SYSTEM > p. 39
  3. [3] https://upload.indiacode.nic.in/schedulefile?aid=AC_CEN_2_11_00002_194910_1517807317779&rid=731
  4. [4] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2.11 Money Circulation > p. 55
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Don’t just practise – reverse-engineer the question. This panel shows where this PYQ came from (books / web), how the examiner broke it into hidden statements, and which nearby micro-concepts you were supposed to learn from it. Treat it like an autopsy of the question: what might have triggered it, which exact lines in the book matter, and what linked ideas you should carry forward to future questions.
Q. Which of the following is not included in the assets of a commercial bank in India? [A] Advances [B] Deposits [C] Investments [D] Mon…
At a glance
Origin: Books + Current Affairs Fairness: Moderate fairness Books / CA: 7.5/10 · 2.5/10
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This is a classic 'Sitter' testing fundamental banking concepts found in NCERT Class XII. The question relies on the basic accounting equation: Sources of Funds (Liabilities) vs. Uses of Funds (Assets). If you know a bank 'owes' you your deposit back, the answer is immediate, regardless of how technical the other options look.

How this question is built

This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.

Statement 1
Are advances included in the assets of a commercial bank in India?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 3: Money and Banking - Part II > 3.6 Categorization of Loans > p. 134
Presence: 5/5
“(No need to go in detail on this topic, just have a look on the terms which will help you in understanding other topics) Loans and advances given by banks are 'assets' for them (the "loan document" signed by the borrower and kept with banks is an asset for the bank as based on this loan document the”
Why this source?
  • Explicitly states: 'Loans and advances given by banks are "assets" for them.'
  • Notes the loan document kept by the bank is treated as an asset, linking advances to bank asset records.
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2.31 Previous Years Questions > p. 118
Presence: 3/5
“• (ii) It is an effort to increase RBI's control over commercial banks through computerization.• (iii) It is a detailed procedure by which a bank with huge non-performing assets is taken over by another bank Select the correct answer using the code given below. • (a) (i) only• (b) (ii) & (iii) only• (c) (i) & (iii) only• (d) (i), (ii) & (iii)• 24. What is/are the purpose/purposes of the 'Marginal Cost of Funds based Lending Rate (MCLR)' announced by RBI? [2016] • (i) These guidelines help improve the transparency in the methodology followed by banks for determining the interest rates on advances.• (ii) These guidelines help ensure availability of bank credit at interest rates which are fair to the borrowers as well as the banks.”
Why this source?
  • Refers to MCLR guidelines aimed at determining interest rates on advances, treating advances as interest-bearing items of banking activity.
  • Implied linkage: banks set rates on advances because advances are on the balance sheet (revenue-generating), consistent with asset treatment.
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