Explain Loan Activities Of Banks In India

• Money & Credit (C10)

Explain Loan Activities Of Banks In India?

Answer

1. Banks use the major portion of the deposits to extend loans.

2. Banks make use of the deposits to meet the loan requirements of the people.

3. Banks mediate between those who have surplus funds (the depositors) and those who are in need of these funds (the borrowers).

4. Banks charge a higher interest rate on loans than what it offers on deposits.