A major liability of a commercial bank arises from

Explanation

This Commerce question is asking about a major liability that commercial banks face. The question is a single-choice question with four options to choose from. The options are customer's deposits, loans and advances, overdrafts, and staff allowances. The correct answer to this question is Option A: customer's deposits.

A liability is an obligation or responsibility that a person or organization has to someone else. In the case of a commercial bank, a liability refers to the money that the bank owes to its customers. The money that customers deposit into their bank accounts is a liability for the bank because it has an obligation to pay back that money whenever the customer requests it.

Therefore, if a bank is unable to fulfill its obligation to pay back its customers' deposits, it could face serious financial consequences. This is why customer deposits are considered a major liability for a commercial bank.

While loans and advances, overdrafts, and staff allowances are also liabilities for a commercial bank, they are not considered major liabilities in the same way that customer deposits are. Loans and advances are liabilities because the bank has an obligation to pay back the money that it borrows from other financial institutions or the central bank. Overdrafts are liabilities because they represent a negative balance in a customer's account, meaning the bank owes the customer money. Staff allowances are liabilities because they represent money that the bank owes to its employees.

In summary, the major liability for a commercial bank arises from its customers' deposits, which the bank has an obligation to pay back whenever the customer requests it. Loans and advances, overdrafts, and staff allowances are also liabilities for the bank, but they are not major liabilities in the same way that customer deposits are