ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The 5 most important banking services are checking and savings accounts, loan and mortgage services, wealth management, providing Credit and Debit Cards, Overdraft services.

Detailed explanation-2: -The primary source of income for banks is the difference between the interest charged from the borrowers and the interest paid to the depositors. Banks usually collect higher interest from loans than the interest they provide for deposits.

Detailed explanation-3: -Stockholders may also choose to reinvest their dividends in the bank. Banks earn money in three ways: They make money from what they call the spread, or the difference between the interest rate they pay for deposits and the interest rate they receive on the loans they make.

Detailed explanation-4: -Paid up capital. Bank’s own paid up capital. Reserve fund. Reserve is another source of fund which is maintained by all commercial banks. Profit. Profit is another source to a bank for the purpose of business. Borrowing from central bank. Other sources. Deposits.