Explain in 40 words Loan Activities of Banks class 10 economics CBSE
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Banks are financial intermediaries which offer loan for a wide range of economic activities.
They keep small proportions of the deposits with them as cash.
These deposits are used to offer loans to the borrowers. ...
Banks charge a higher interest rate on loans than what they offer on deposits.
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BTW even I'm in class 10th
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Banks play a very important role in credit creation in the economy by granting loans.
Explanation:
- Banks are one of the most important lending institutions in the country.
- These are approved by the reserve bank of India to provide loans and credit to not only individual customers but also to institutional customers and organizations.
- The loan provided by banks is helpful in creating the money supply in the economy.
- In addition, the loans provided by banks also help in various business and employment activities.
- These loans also serve a very important purpose of saving the borrowers from an informal source of credit.
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