Banking Services and Operations

Purchase and Sale of securities (Government bonds, securities) is a secondary function of commercial banks, also called agency functions or utility functions. Primary functions are accepting deposits and lending. Overdraft facilities, discounting bills, money at call, and remittances are all primary banking functions, not secondary.

In SMS banking, pull messages are initiated by the customer (e.g., balance inquiry, mini-statement requests), while push messages are sent by the bank without a customer request (e.g., OTPs, alerts). Option B incorrectly states that OTP is a pull message, when in fact OTPs are classic push messages sent by the bank in response to a transaction initiated elsewhere, not via SMS request. This makes option B the incorrect statement that the question seeks.

Demat account charges typically include account opening fees, annual maintenance charges, custodian fees, and transaction fees. These are standard operational costs for maintaining electronic securities. Option C describes 'Annual fee for spot conversions of one currency into another' - this is a forex/foreign exchange service charge, completely unrelated to Demat account operations. Currency conversion is not a function performed by Demat accounts, making this the option that is NOT a major charge on Demat accounts.

Credit creation by banks depends on: the amount of cash reserves in the banking system (more cash = more lending capacity), the Cash Reserve Ratio set by the central bank (lower CRR = higher credit creation), the central bank's monetary policy (which influences lending rates and money supply), and customers' willingness to borrow (demand for credit). Special Drawing Rights (SDR) are an international reserve asset created by the IMF, not a factor in domestic bank credit creation - SDRs relate to international liquidity, not a country's internal banking credit multiplier.

Commercial banks have traditional functions (accepting deposits, lending, creating deposits) and non-traditional modern functions. Creating deposits through lending is a FUNDAMENTAL traditional function of banking - it's how banks create money. ATM facilities, credit cards, and venture capital financing are modern, non-traditional services that banks have diversified into.

Yes, it is the correct choice. In CAMEL rating, M stands for management. 

Yes, it is the correct choice. 

Yes, it is the correct choice. Consumer durables loan is meant for purchasing white goods.

Yes,  it is correct choice. SLR is kept by banks in the form of  G securities, G- bands, GOLD.

Credit gurantee corporation is not available to the depositors of NBFC. So this is the right choice.

The power of the commercial banks to expand deposits through expanding their loans and advances is known as credit Creation. So this is correct answer.

In monetary economics, M3 is considered the broader measure of money supply as it includes M1 (currency + demand deposits) plus M2 (savings deposits) and time deposits. M1 is the narrowest measure representing only the most liquid forms of money. M4 would be even broader if it exists in the system, but M3 is typically cited as the key broad aggregate.

Financial inclusion focusses on opening accounts of low income groups or disadvantaged of the society.

All the above options are true about core banking solutions. Hence, option 5 is correct.