Loans

Q.

Major portion of the deposits is used by banks for. Commerce - Q&A

1. setting up new branches

2. paying taxes

3. paying interest on loans

4. extending loans

Q. How do banks act as middlemen between those who have surplus funds and those who need funds?

1. Banks accept deposits from depositors, and lend some of it as loan to borrowers.
2. Banks borrow from the Reserve Bank of India, and lend it as loan to borrowers.
3. Banks accept deposits from the Reserve Bank of India, and lend some of it as loan to borrowers.
4. Banks create a platform where lenders and borrowers meet.

Q. act as middlemen between those who have surplus funds and those who are in need of those funds.

1. Funders
2. Loans
3. Investors
4. Banks

Q. Can banks use all deposits as loans?

1. No
2. Yes

Q. What would happen if no one deposits money in banks?

1. The country would not grow economically.
2. People would have more money in hand.
3. Banks would not be able to give loans.
4. Banks would be free from paying interest for the bdeposits.

Q. Identify the role of banks in the loan process.

1. Banks act as middlemen between depositors and borrowers.
2. Banks act as middlemen between depositors and the RBI.
3. Banks act as middlemen between the RBI and borrowers.
4. Banks act as middlemen between farmers and customers.