Every country has its own financial system and every country’s financial system is different from the others. Some are stock market dominated and others are banking industry dominated. India is dominated mainly by banking system with lot of people depositing their money into the banks rather than investing it in the stock markets. Most popular instruments with Indian population, primarily with parents, is FD i.e. Fixed Deposits. The reason behind preference for banks can be risk aversion, with banks being considered safer than stock markets. We should remember that banks also can fail, giving depositors a run for their money. That is why people consider depositing their money with trustworthy banks. Trustworthy are those which have been in the market since a long time and have established a reputation. One of them is State Bank of India. It is the largest public sector lender bank in the country. The largest private sector bank, as of April 2022, was HDFC. Apart from depositing, borrowing money from banks is also very prevalent. So, major financial needs of Indian diaspora are being fulfilled by banks.

Which of the following are assets of a bank?

i. Loans and advances

ii. Bills of exchange discounted

iii. Furniture and machinery

iv. Cash in hand

i, ii, iii, iv

The correct answer is Option 3: i, ii, iii, iv

An asset is something that provides a current, future, or potential economic benefit for an individual or other entity.

Loans are the money lent by bank an will be received back in future.

Bills of exchange which were discounted are the ones against which bank has lent money and will be receiving it from the customer of its client.

Furniture and machinery and cash in hand are assets of any organization.