Question

loans are children of deposits and deposits are children of loan 'explain'.​

Answer 1

Answer:

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Answer 2

Answer:

The phrase "Loans are children of deposits and deposits are children of loans" is often used to describe the symbiotic relationship between banks and their customers. Here's what it means:

1. Loans are children of deposits: Banks rely on deposits from customers to have funds to lend out to other customers. Without deposits, banks would not have the money to lend. Thus, loans are the offspring or result of having deposits to lend out.
2. Deposits are children of loans: On the other hand, when a bank lends money to a borrower, that borrower's loan becomes a deposit for the bank. Deposits are therefore the offspring or result of lending out loans.

Explanation:

This relationship shows that banks require both deposits and loans to function. Without deposits, there can be no loans, and without loans, there can be no deposits. As such, it highlights the importance of responsible lending and borrowing, as well as the need for banks to carefully manage their deposit and loan portfolios to ensure they remain sustainable and profitable.

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