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प्रश्न
How do banks mediate between those who have surplus money and those who need money?
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उत्तर
A bank mediates between those who have surplus money and those who need money by allowing both to open accounts with it. Banks only keep about 15% of cash reserves to provide to people who come to withdraw money on a daily basis. Those with surplus money are encouraged to invest with the bank and are paid a certain rate of interest for the same. Those who need loans are required to pay interest on their loans. The difference between payments to lenders and receipts from borrowers comprises the bank’s earnings. Thus, the bank acts as a beneficiary for those with surplus money as well as those who need money.
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संबंधित प्रश्न
Why is it necessary for the banks and cooperative societies to increase their lending facilities in rural areas? Explain.
Majority of the credit needs of the ______ households are met from informal sources.
______ costs of borrowing increase the debt-burden.
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Explain any three reasons for the banks and cooperative societies to increase their lending facilities in rural areas.
Answer the following question.
Give any two examples of the informal sector of credit.
Answer the following question.
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