Question

Money deposited in the banks are considered __________ of the banks.

• A. Asset
• B. Net Worth
• C. Liabilities
• D. Statutory Liquid Ratio

Hint:

For banks: Deposits = Liabilities, Loans = Assets. This is opposite to the customer’s perspective.

Answer 1

The Correct Option is C

Step 1: Recall banking balance sheet structure.
- Assets: Loans, investments, reserves → things the bank owns.
- Liabilities: Deposits, borrowings → things the bank owes.
Step 2: Apply to deposits.
Deposits are funds that customers can withdraw at any time. Hence, they are obligations of the bank. That means they are liabilities.
Step 3: Eliminate other options.
- (A) Assets → wrong, loans given by banks are assets, not deposits.
- (B) Net worth → refers to capital + reserves, not deposits.
- (D) SLR → regulatory requirement, not deposits.
Final Answer: \[ \boxed{\text{Liabilities}} \]