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?

examrobotsa's picture

Submitted by examrobotsa on

Q: 82 (IAS/2010)
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?

question_subject: 

Economics

question_exam: 

IAS

stats: 

0,89,94,23,35,89,36

keywords: 

{'commercial banks': [0, 0, 1, 1], 'executors': [0, 0, 1, 0], 'trustees': [0, 0, 2, 0], 'securities': [0, 0, 0, 1], 'functions': [0, 0, 0, 1], 'shares': [0, 3, 3, 6], 'wills': [0, 0, 1, 0], 'customers': [0, 0, 1, 2], 'behalf': [0, 0, 1, 4]}

Both statement 1 and 2 correctly define the functions of the commercial banks in India, making option 3 the correct choice.

Statement 1 describes the banks’ function as being intermediary in the buying and selling of shares and securities on behalf of their customers. This is done through the bank`s brokerage and demat departments.

Statement 2 is also correct as commercial banks in India can act as executors and trustees of wills. When a bank acts as an executor, it follows the directions of a will to manage and distribute a person’s assets after they have passed away. When a bank is a trustee, it holds and manages assets for the benefit of someone else, according to the terms of a trust agreement.

Therefore, given both functions are true, option 3 (Both 1 and 2) is the correct answer.