Question

explain the loan activities of banks with examples of your own​

Answer 1

Answer:

1. Banks provide loans for various economic activities.

2. Banks keep only a small proportion of the deposits with them as cash.

3. These deposits are used to meet the loan requirement.

Explanation:

eg: If a farmer took a loan for 1 lakh, he/she didn't get the full amount from the loan. To get the balance amount he/she goes to the moneylender ,who charges high rate of interest, which causes debt trap to the person who has taken the loan.