Question

How do the banks use the major portion of the deposits to extend loans?

Answer 1

the largest part of public deposits is given by the bank to the needed person at a some rate of interest

Answer 2

Banks use a significant share of deposits to provide a variety of loans to the consumers. They impose a greater rate of interest on mortgages in comparison to the interest what they provide on fixed deposits. The distinction in the form of profits which bank shares on lending loans at higher interest rate to the borrowers for getting loans which is comparatively very less to the interest paid on fixed deposits is the principal source of revenue for the banks.