What distinguishes a bank from other financial institutions?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. Accepting deposits.
What distinguishes a bank from other financial institutions is its acceptance of deposits. Banks have the authority to accept deposits from the public, which they use for lending purposes. While other financial institutions may also offer loans or borrowings, only banks are typically licensed to accept demand deposits (such as savings or checking accounts) from individuals and businesses. This function allows banks to play a central role in the economy by facilitating savings and credit for economic growth.