Explain any three loan activities of banks in India

Money and Credit (10)

Explain any three loan activities of banks in India.

Answer

Loan activities of Banks in India:

  1. Banks use the major portion of the deposits to extend loans.
  2. Banks charge a higher interest rate on loans than what it offers on deposits.
  3. Banks make use of the deposits to meet the loan requirements of the people.
  4. Banks mediate between those who have surplus funds (the depositors) and those who are in need of these funds (the borrowers).
  • Exam Year: 2017