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How do banks mediate between those who have surplus money and those who need money?

Posted by Muskan Pandey 5 years, 9 months ago

CBSE > Class 10 > Social Science

4 answers

Amar Singh 4 years, 7 months ago

banks accept the deposit money from people having surplus money ,they deposit money in bank first make account with own name and banks pay interest on the deposit money and banks use 50 percent of money , in this way surplus people (deposited ) people need loan ( borrower) , bank give loan with higher interest behalf of loan , when the depositer will come on his given date bank pay interest to depositer from borrower repay interest and the banks meditate the oeoples

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Aryan Pandey 5 years, 9 months ago

Depositers deposit their money in banks.That money is given to the people who need it as loan.The borrower returns the money to the bank with higher interest.Then,the bank gives back to the depositer when they withdraw their money. In this way,the banks mediate between depositer and borrower.

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Sita Ram 5 years, 9 months ago

Banks accepts the deposits from people having surplus money and pay them interests.Banks keep only a small amount of this money,also known as cash reserve ratio (in indai,it generally 15percent) with them and give rest of money to needy people as loan (credit) and take interest from those people (known as lending rate) .This difference between lending rate and borrowing rate is main source of income for banks. By this way baks medaite between people having surplus money and who need it along with the creation of credit (loan).

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Laxmipriya Pati 5 years, 9 months ago

Those who have surplus money are known as depositers. They deposit their money in the bank and the bank offers interest on it. This deposited money is then given as loans or credit to the needy people or borrower. In this way banks mediate the depositer and borrower

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