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How do the deposits with the …

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How do the deposits with the banks become their source of income?

Posted by Sunil Kumar 5 years, 2 months ago

CBSE > Class 10 > Social Science

1 answers

Yogita Ingle 5 years, 2 months ago

Banks use a significant share of the deposits to provide mortgages to people for several commercial enterprises. The interest charges on mortgages are extremely costlier than what the bank commands on the collateral it has. Therefore, the distinction between what is imposed by the borrowers and what is given to the depositors is the source of revenue of the banks.

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