Option 1 states that the main functioning of the banking system is to accept deposits and provide credit. This means that banks are responsible for taking in money from individuals and businesses through deposits and using those funds to provide loans and credit to other individuals and businesses.

Option 2 states that the main functioning of the banking system is to accept deposits and subsidies. However, subsidies are typically provided by the government or other organizations, not the banking system. Therefore, this option is incorrect.

Option 3 states that the main functioning of the banking system is to provide credit and subsidies. As mentioned before, banks are not typically responsible for providing subsidies. Therefore, this option is also incorrect.

Option 4 states that the main functioning of the banking system is to accept deposits, provide credit, and subsidies. While banks do accept deposits and provide credit, as mentioned in Option 1, as explained before, they do not typically provide subsidies. Therefore, this option is also incorrect.

In conclusion, the correct answer is Option 1: accept deposits and provide credit.