Eco-Money and banking, page no 142 #Eco #Moneyandbanking

What are Commercial banks:

Commercial banks are financial institutions that provide a wide range of banking services to individuals, businesses, and government entities. Their primary functions include accepting deposits, offering various loan products, and facilitating payment transactions. Commercial banks play a vital role in the economy by acting as intermediaries between savers and borrowers. They collect deposits from customers, which can be used to extend loans for personal expenses, home purchases, and business investments, thereby fueling economic growth.

These banks generate profit primarily through the interest rate spread, which is the difference between the interest rates they pay on deposits and the rates they charge on loans. Additionally, commercial banks offer services such as checking and savings accounts, credit cards, and wealth management, catering to both individual and corporate clients. They are regulated by government authorities to ensure the safety and soundness of the banking system, maintain stability, and protect depositors' funds. Overall, commercial banks are essential components of the financial system, providing crucial services that support economic activity and development.

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