Practicing Success
Practicing Success
CUET Preparation Today
How do banks fulfill the loan requirements of the people? |
Banks take loans from other organizations to lend Banks make use of the trusts Banks make use of the financial crunch in the economy Banks make use of the deposits |
Banks make use of the deposits |
Banks make use of the deposits to meet the loan requirements of the people. In this way, banks mediate between those who have surplus funds (the depositors) and those who are in need of these funds (the borrowers). Banks charge a higher interest rate on loans than what they offer on deposits. The difference between what is charged from borrowers and what is paid to depositors is their main source of income. |
