ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The difference between the amount charged from borrowers and the amount paid to depositors is the primary source of income for banks.

Detailed explanation-2: -Interest income is money earned by an individual or company for lending their funds, either by putting them into a deposit account in a bank or by purchasing certificates of deposits.

Detailed explanation-3: -Net interest income is defined as the difference between interest revenues and interest expenses. Interest revenues are payments that the bank receives from their interest-bearing assets, and interest expenses are the cost of servicing interest payments to customers on their deposits.

Detailed explanation-4: -Commercial banks make money by providing and earning interest from loans such as mortgages, auto loans, business loans, and personal loans. Customer deposits provide banks with the capital to make these loans.

Detailed explanation-5: -Non-interest income is bank and creditor income derived primarily from fees including deposit and transaction fees, insufficient funds (NSF) fees, annual fees, monthly account service charges, inactivity fees, check and deposit slip fees, and so on.