UPSC Prelims 2019 GS Paper I · Q64 of 100 Economy easy

Which of the following is not included in the assets of a commercial bank in India?

  1. (a) Advances
  2. (b) Deposits ✓ UPSC's answer
  3. (c) Investments
  4. (d) Money at call and short notice

Why the answer is (b)

• A bank's balance sheet lists what it owns (assets) and what it owes (liabilities).

• Deposits are money the bank owes to customers, so they are liabilities — option (b) is the one not included in assets.

• Advances (loans) (a), investments in securities (c) and money lent at call and short notice in the interbank market (d) are all claims the bank holds — assets.

• Other assets include cash in hand and balances with the RBI.

• Hence option (b).

Why the other options are wrong

(a) Advances
Advances are loans made by the bank — an asset.
(c) Investments
Investments in securities are assets.
(d) Money at call and short notice
Money lent at call is an asset.

Asked in the GS Paper I of the UPSC Civil Services Preliminary Examination 2019, held on 2 June 2019. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.

Reading the answer is not the same as getting it right under a clock. Practise this question with UPSC's negative marking, and anything you miss goes into an error notebook until you get it right twice.

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