Question

Explain in detail, how banks use our deposited money to create income for itself? ​

Answer 1

Answer:

ʙᴀɴᴋs ᴜsᴇ ᴀ ᴍᴀᴊᴏʀ ᴘᴏʀᴛɪᴏɴ ᴏғ ᴛʜᴇ ᴅᴇᴘᴏsɪᴛs ᴛᴏ ᴇxᴛᴇɴᴅ ʟᴏᴀɴs ᴛᴏ ᴘᴇᴏᴘʟᴇ ғᴏʀ ᴠᴀʀɪᴏᴜs ᴇᴄᴏɴᴏᴍɪᴄ ᴀᴄᴛɪᴠɪᴛɪᴇs. ... ᴛʜᴇʀᴇғᴏʀᴇ, ᴛʜᴇ ᴅɪғғᴇʀᴇɴᴄᴇ ʙᴇᴛᴡᴇᴇɴ ᴡʜᴀᴛ ɪs ᴄʜᴀʀɢᴇᴅ ғʀᴏᴍ ᴛʜᴇ ʙᴏʀʀᴏᴡᴇʀs ᴀɴᴅ ᴡʜᴀᴛ ɪs ᴘᴀɪᴅ ᴛᴏ ᴛʜᴇ ᴅᴇᴘᴏsɪᴛᴏʀs ɪs ᴛʜᴇ sᴏᴜʀᴄᴇ ᴏғ ɪɴᴄᴏᴍᴇ ᴏғ ᴛʜᴇ ʙᴀɴᴋs.

Answer 2

$\huge \text{Answer:}$

Banks use a major portion of the deposits to extend loans to people for various economic activities. ... Therefore, the difference between what is charged from the borrowers and what is paid to the depositors is the source of income of the banks.