1. Banks provide various facilities to the people. They act as safeguards of the money of the general public and help in saving the money for the safe custody of the banking system. The banks in return also provide a certain rate of interest on such deposits and help people in increasing the value of the money saved.
2. They provided facilities for easy withdrawal at any point of time that has been deposited with the bank. These deposits which provide such facilities of withdrawal on demand are known as demand deposits.
3. Banks also perform an important function of providing loans (a specific amount of money borrowed, which is to be returned back with the rate of interest) to the people for a variety of purposes. People can engage in lending activities from banks with convenient modes of repayment in easy installments. (Instalment is a specific amount of money to be returned within a specific time period with equal amount of money returned each time)
NOTE – Banks are the most important centers of economic and financial activity. As explained in the answer above, they perform a no. of functions which are of great importance in our day-to-day lives.
Rate this question :
Why is money acceSocial Science - Board Papers