Which of the following statements is true about banks?

see full answer

Start JEE / NEET / Foundation preparation at rupees 99/day !!

21% of IItians & 23% of AIIMS delhi doctors are from Sri Chaitanya institute !!

An Intiative by Sri Chaitanya

Banks mediate between those who want to sell one commodity in exchange for other commodities.

Banks use a major proportion of deposits to invest in mutual funds.

Banks charge a lower interest rate on a loan than the interest rate they offer on deposits.

Banks use deposits to fulfil the loan requirements of all the people.

answer is D.

(Unlock A.I Detailed Solution for FREE)

Ready to Test Your Skills?

Check your Performance Today with our Free Mock Test used by Toppers!

Take Free Test

Detailed Solution

Banks use deposits to fulfil the loan requirements of all people. People keep the money they do not require daily use with the banks as deposits. Bank even pays them interest on it. Banks act as mediators to bring this money back into the market. It loans out these deposits to those seeking loans at an interest rate higher than they give on the deposits. The bank earns the working capital and profit from this difference in the interest rates.

Watch 3-min video & get full concept clarity

tricks from toppers of Infinity Learn

Result Producing online coaching for JEE/NEET of south India

Largest All India Test Series for JEE/NEET

Best Books for IIT JEE

Best Books for NEET

🔥 Start Your JEE/NEET Prep at Just ₹1999 / month - Limited Offer! Check Now!

Get Expert Academic Guidance – Connect with a Counselor Today!

Result Producing online coaching for JEE/NEET of south India

Largest All India Test Series for JEE/NEET

Best Books for IIT JEE

Best Books for NEET