State whether the following statements are True or False. 1. Commercial banks are the backbone of modern economy.

State whether the following statements are True or False.
1. Commercial banks are the backbone of modern economy.
Answer: 
Commercial banks are the backbone of modern economy. – True

Explanation:
The above statement is true. By channelizing the surplus money from the public to loan seekers, they create credit in the economy. Credit creation paves the path for the growth of the economy. Also, commercial banks play an important role in controlling the money supply in the economy. Thus, commercial banks are considered the backbone of modern economy.

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