Science, asked by kumarji7506, 1 year ago

Describe loaning activity of banks in details

Answers

Answered by anurag36
1
The loan activities of bank can be understood in the following manner.

Banks keep about 15% of cash reserves out of the deposits it receives in the form of savings. The banks pay a fixed amount of interest rate on the savings. The remaining of the deposits is lent out as loans to those who require. The borrowers are required to pay the interest on loans. The difference between payment to the lenders and receipts from the borrowers comprises the earnings of the bank. 

Answered by shivannya
6
hlo dear
A bank is a financial institution that accepts deposits from the public and creates credit.[1]Lending activities can be performed either directly or indirectly through capital markets. Due to their importance in the financial stability of a country, banks are highly regulated in most countries. Most nations have institutionalized a system known as fractional reserve banking under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity, banks are generally subject to minimum capital requirements based on an international set of capital standards, known as the Basel Accords.

Banking in its modern sense evolved in the 14th century in the prosperous cities of Renaissance Italy but in many ways was a continuation of ideas and concepts of credit and lending that had their roots in the ancient world. In the history of banking, a number of banking dynasties — notably, the Medicis, the Fuggers, the Welsers, the Berenbergs and the Rothschilds — have played a central role over many centuries. The oldest existing retail bank is Banca Monte dei Paschi di Siena, while the oldest existing merchant bank is Berenberg Bank.

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