0
Commercial Banks make profit and generate revenue by two ways:
- By charging you a fee for the services they provide you
- By lending the money you have deposited into your account, to other loan customers and getting an interest on the same.
Interest income is the highest revenue and profit generator for any bank.
What else can I help you with?
What are the importance of banks in the economy?
Banks do not create any money. It only borrow and lend money from their customers. Banks are very important to economy because if bank have certain amount with them then bank can invest in other sectors. which will help in long term by giving them return. Banks have a certain team to do that.
Commercial banks and their relationship with the reserve bank?
we take/borrow money from the commercial banks and the commercial banks take/borrow money from the reserve bank
Role of commercial banks in developing countries?
The can help to grow the country. They will provide money to the growing government along with issue money to the people to use to grow the economy.
How do banks create money and what is the process involved in this financial mechanism?
Banks create money through a process called fractional reserve banking. When a bank receives a deposit, it is required to keep only a fraction of that deposit on reserve and can lend out the rest. This allows the bank to create new money through loans, which in turn increases the money supply in the economy. This process is regulated by central banks to ensure stability in the financial system.
Pet banks and their affect on economy?
it made our economy way better than it ever was yayy money money money!
Who starts banks?
A commercial bank is started by private investor(s), since a commercial bank's primary goal is to make profit by earning interest from loaning out money. The Federal Reserve Banks, or any other countries central banks like the Bank of England, are owned by the government and are created as a central bank to make sure the economy is healthy by controlling the money supply, regulating banks, etc.
How do banks help expand the economy?
by loaning money
How does a bank create money through the process of fractional-reserve banking?
Banks create money through fractional-reserve banking by only keeping a fraction of deposits on hand and lending out the rest. This allows them to create new money through loans, increasing the money supply in the economy.
How can marketing concept be applied in commercial banks?
get money.
Can a single bank create money?
Banks do not create money. They store it. The government prints money.
What does the Fed do for commercial banks?
The main thing the Fed does is that it is the Bank that Banks deposit their money in.
What time value of money applications are used by commercial banks?
Time, is Money
