Question

Why are financial institutions also known as ‘Development Banks’ ? Explain

any three limitations of raising loans from financial institutions.

Answer 1

This question can be answered in various ways. one way -

let's take the example of shares and debentures. They are a part of financial institutions and thus institutions themselves. So when we invest in these, these funds are utilized by the company to run the institutions and business purposes. By investing and utilizing funds the profit is earned and a part is kept and a part is shared. it's work is similar to that of a bank, and thus a financial bank.