Question : The process of insuring bank deposits in case the bank fails is called:
Option 1: Credit rating
Option 2: Credit guarantee
Option 3: Deposit insurance
Option 4: Credit insurance
Answer (1)
9th Jan, 2024
Correct Answer: Deposit insurance
Solution : The correct answer is (c) Deposit insurance.
The process of insuring bank deposits in case the bank fails is called deposit insurance. Deposit insurance is a financial protection mechanism provided by a government or a designated agency to protect depositors' funds in case a bank or financial institution fails or becomes insolvent. It ensures that depositors can recover a certain amount of their deposits in such situations.
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