Which of the following does not constitute lending by banks ........

Which of the following does not constitute lending by banks?

short term advances

cash credit

deposits with fixed period of maturity

banks investments in government securities and approved bonds

- Option 1: Short term advances

- These are loans provided by banks for a short period.

- Generally used for temporary working capital needs.

- Constitute a form of lending.

- Option 2: Cash credit

- It's an arrangement allowing businesses to withdraw funds more than the credit balance.

- It's secured by collateral.

- Considered a type of bank lending.

- Option 3: Deposits with fixed period of maturity

- These are funds placed in a bank for a specific term.

- They are an investment by customers, not lending by banks.

- Correct Answer:

- Option 4: Banks investments in government securities and approved bonds

- Banks invest in securities and bonds to earn returns.

- Considered an investment, not lending.

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