Question

"Deposits with the banks are beneficial to the depositors as well as to the nation”. Examine the statement.

Answer 1

Answer:

Benefit of deposits to the depositors:

• Bank accepts the deposits and pays interest to the depositor.

• Banks help people save their money and keep their money in safe custody of the bank.

• People can withdraw the money as and when they require.

• Banks also grant loans to people for a variety of purposes. In times of need, individuals, business houses and industries can borrow money from the banks.

Benefit of deposits to the Nation:

• Banks use the major proportion of the deposit to extend loans.

• There is a huge demand for loans for various economic activities. In times of need, business houses and industries can borrow money from the banks.

• Banks mediate between those who have surplus funds and those who are in need of these funds. Thus, it helps in the economic development of the Nation.

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