how do banks madiate b/w those who have surplus money and those who need money
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Banks borrow money from the depositors to lend to the creditors
They borrow at an interest which is lower than that of the creditors
The difference between the interest results into their incomes
They also keep a small amount of the money borrowed so they can give it to the person who comes to withdraw money
By this income they pay the salaries and work out their payments and the left out amount is their profit...
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They borrow at an interest which is lower than that of the creditors
The difference between the interest results into their incomes
They also keep a small amount of the money borrowed so they can give it to the person who comes to withdraw money
By this income they pay the salaries and work out their payments and the left out amount is their profit...
Pls Mark as brainliest
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