[Solved] A commercial bank law creates credit only if it has -

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Q.	A commercial bank law creates credit only if it has -
A.	Cash in the vault
B.	Excess reserves
C.	Permission of Reserve Bank of India
D.	(4) Cooperation of other banks
Answer» A. Cash in the vault
Explanation: A commercial bank is a profit- seeking business, dealing in money and credit. It is a financial institution dealing in money in the sense that it accepts deposits of money from the public to keep them in its custody for safety. So also, it deals in credit, i.e., it creates credit by making advances out of the funds received as the deposits to needy people. So it creates credit from the cash deposits with it.

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