In context of banking which of the following is are true 1 Loans advanced by Banks are their Liabili...........

Economic Affairs Types of Banks and Banking

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In context of banking which of the following is/are true?

1. Loans advanced by Banks are their Liabilities and deposits with them are their Assets.

2. A sick bank is one which is having more Liabilities than Assets.

Select the correct answer using codes given below

1 only

2 only

All of the above

None of the above

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Explanation:

First statement is incorrect. Money provided by the bank to entities for fulfilling their short term requirements is known as Advances. Loan is a kind of debt while Advances are credit facility granted to customers by banks. Loans are provided for long duration which is just opposite in the case of Advances.
Second statement is correct i.e. A sick bank is one which is having more Liabilities than Assets.