Banking Practice Exam 2025 - Free Banking Practice Questions and Study Guide

The role of a commercial bank encompasses several key functions that are fundamental to its operation in the financial system. Accepting deposits, providing loans, and facilitating electronic payments are all core functions of a commercial bank.

Accepting deposits allows banks to collect funds from individuals and businesses, which can then be used for lending or investments. Providing loans is essential for banks as it generates income through interest payments from borrowers. Facilitating electronic payments is increasingly important in a digital age, enabling customers to transact efficiently and securely.

On the other hand, issuing currency is not typically a function performed by commercial banks. Currency issuance is a responsibility of central banks, which manage the money supply and monetary policy for the economy. This distinction is critical in understanding the different roles that various banking institutions play within the financial system. Thus, identifying the non-core function correctly highlights the boundaries of a commercial bank's operations.