Explain 'granting of loans' and 'granting of advances' as a function of
commercial banks.
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commercial banks.
Explanation:
Commercial bank is a bank who accepts deposit from public and give loans to them. sole purpose of this financial institution is to earn profit.
When public deposits money in the bank, it charges some amount for this and when it gives loan to the public it charges interest on the loan. This is the main source of income for a commercial bank.
Granting loan and Granting advances
Granting loans and advances are the two main functions of a commercial bank. It gives out short term loans, midterms loan and long term loans .
Bank charges defferent rate and amount on loans on the basis of duration, that the loan has been taken for.
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