How bank act as a mediater.
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Banks use the major portion of deposits with them to extend loans to people who need money. There is a huge demand for loans for various economic activities. In this way, banks mediate between those who have surplus funds and those who are in need of these funds. Banks charge a higher rate of interest on loans compared to what they offer on deposits. The difference between what is charged from borrowers and what is paid to depositors is their main source of income. Thus, by accepting deposits and by advancing loans, banks mediate between those who have surplus money and those who need money.
i Hope help you please Mark brainlist
i Hope help you please Mark brainlist
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Hii..that's your answer....
it acts as a mediator between who have surplus money and those in need of money
people having surplus money deposits it in the bank and they get a certain interest on it after fixed time
people in need of money than take loans from the bank
the bank gives them money deposited by people having surplus amount and a fixed interest is also taken from them
this way bank plays a vry crucial role between them
it acts as a mediator between who have surplus money and those in need of money
people having surplus money deposits it in the bank and they get a certain interest on it after fixed time
people in need of money than take loans from the bank
the bank gives them money deposited by people having surplus amount and a fixed interest is also taken from them
this way bank plays a vry crucial role between them
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