Explain Any Three Loan Activities of Banks in India.

The three loan activities of the banks are:

  1. People have extra cash with them. Those having extra cash open a bank account in their name and deposit the surplus money there.
  2. Out of the total money deposited with the banks, 15% of it is kept as minimum cash balance to pay to the depositors who might come to withdraw money from the bank on any given day.
  3. Rest of the amount is used to extend loan to the borrowers.

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  1. What Are the Two Categories of Sources of Credit? Mention Four Features of Each.
  2. When Does Credit Push the Borrower Into a Debt-Trap? Explain With the Help of an Example.
  3. How Can Money Be Easily Exchanged for Goods and Services? Give an Example to Explain.
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