Correct Option
Deposits represent funds placed by customers with the bank. From the bank's perspective, these are obligations that must be repaid on demand or after a specified period. Therefore, deposits constitute a liability for a commercial bank, not an asset.
Incorrect Options
- Advances: These are loans and credit facilities extended by the bank to its customers. They generate interest income for the bank and are thus classified as assets.
- Investments: Banks invest in various instruments such as government securities, bonds, and shares. These investments yield returns and are held by the bank, making them assets.
- Money at call and short notice: This refers to short-term loans given by a bank to other banks or financial institutions, repayable on demand or with very short notice. These are assets as they represent funds due to the lending bank.