The correct answer is (b) Demand deposits.
Demand deposits are the most important component of the liabilities of Commercial Banks in India. They are deposits that can be withdrawn on demand by the depositor. Demand deposits are a major source of funds for commercial banks, and they are used to finance a variety of activities, including lending, investment, and payment processing.
Time deposits are deposits that cannot be withdrawn on demand. They are typically held for a fixed period of time, and they earn interest. Time deposits are a less important source of funds for commercial banks than demand deposits.
Inter-bank liabilities are obligations that commercial banks owe to each other. They arise from the settlement of inter-bank transactions, such as the clearing of cheques. Inter-bank liabilities are a relatively small component of the liabilities of commercial banks.
Other borrowings are borrowings from sources other than depositors, such as the central bank and other financial institutions. Other borrowings are a relatively small component of the liabilities of commercial banks.
In conclusion, demand deposits are the most important component of the liabilities of Commercial Banks in India. They are a major source of funds for commercial banks, and they are used to finance a variety of activities.