Question

explain loan activities of bank?

Answer 1

Loan activities of a bank.Let us see what the banks do with the deposits they receive...Banks charge a higher rate interest on loans than what they offer on deposits.The difference between what is charged from borrowers and what is paid to depositers is their main source of income.Hope it will help u.
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Answer 2

Explanation:

LOAN ACTIVITIES OF BANKS:

1. Banks keep only a small proportion of their deposits as cash with themselves.

2. This is kept as a provision to pay the depositors who might come to withdraw money from the bank on any given day.

3. Since, on any particular day, only some of its many depositors come to withdraw cash, the bank is able to manage with this cash.

4. Banks use the major portion of the deposits to extend loans.

5. There is a huge demand for loans for various economic activities.

6. Banks make use of the deposits to meet the loan requirements of the people.

7. In this way, banks mediate between those who have surplus funds and those who are in need of these funds.

8. Banks charge a higher interest rate on loans than what they offer on deposits.

9. The difference between what is charged from borrowers and what is paid to depositors is their main source of income.

hope this helps u mate