Question

what do banks do with the deposits which they collect from the public?

Answer 1

they give this deposits to an individual who needs collateral (loan). on some interest rates
the difference between deposits and interest given on loan is banks income

Answer 2

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Banks accept deposits from the Public and use the major portion of these deposits to extend loans. In this way, bank acts as a mediator between those who have surplus funds (the depositors) and those who are in need of these funds (the borrowers).