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Question
Identify the characteristic of a bank that makes it a middleman between those who have surplus funds and those who are in need of these funds.
Identify the characteristic of a bank that makes it a middleman between those who have surplus funds and those who are in need of these funds.
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Solution
The correct option is B Link between depositors and borrowers
The bank acts as a middleman between those who have surplus funds, i.e., the depositors, and those who are in need of these funds, i.e., the borrowers. This is not provided free of cost and generally, banks earn a profit mobilising the surplus.
The bank acts as a middleman between those who have surplus funds, i.e., the depositors, and those who are in need of these funds, i.e., the borrowers. This is not provided free of cost and generally, banks earn a profit mobilising the surplus.
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