Question

What would happen if no one deposits money in banks?

• A. The country would not grow economically.
• B. People would have more money in hand.
• C. Banks would not be able to give loans.
• D. Banks would be free from paying interest for the bdeposits.

Answer 1

Answer: (A), (C)

Banks would not be able to give loans.

Bank deposits ensure the safety of our money. However, banks too derive some benefits from our deposits, which in turn benefits the country as a whole.

Banks use deposits to provide loans. These loans increase the economic activities in the country, leading to economic growth. Also, banks profit from the interest on these loans.