Explain the basic functions performed by banks.

1.	Explain the basic functions performed by banks.
Answer» Banks are those institutions which accept deposits from the public and lend out money to the borrower on certain conditions. They operate on the basis of common bye-law and criteria prepared by the Reserve Bank of India. Banks accept deposits from people, institutions, and government and disburse this amount as loans to people, institutions and government. The banks take back the loan amount with interest after a particular period and repay the depositors with interest. Thus the banks acts as the intermediary between borrowers and lenders.

Answer»

Banks are those institutions which accept deposits from the public and lend out money to the borrower on certain conditions. They operate on the basis of common bye-law and criteria prepared by the Reserve Bank of India.

Banks accept deposits from people, institutions, and government and disburse this amount as loans to people, institutions and government. The banks take back the loan amount with interest after a particular period and repay the depositors with interest. Thus the banks acts as the intermediary between borrowers and lenders.

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