Banking Loan Clerk

The bank earns profit in various ways

☛ a) Banking value chain

☛ b) Accepting deposit

☛ c) Providing funds to borrowers on interest

☛ d) Interest spread

☛ e) Additional charges on services like checking account maintenance, online bill payment, ATM transaction

Statutory Liquidity Ratio refers to the amount that the commercial banks require to maintain in the form of cash, or gold or govt. approved securities before providing credit to the customers. Statutory Liquidity Ratio is determined and maintained by the Reserve Bank of India in order to control the expansion of bank credit.

A Bank rate is the interest rate that is charged by a country’s central or federal bank on loans and advances to control money supply in the economy and the banking sector. This is typically done on a quarterly basis to control inflation and stabilize the country’s exchange rates. A fluctuation in bank rates triggers a ripple-effect as it impacts every sphere of a country’s economy. For instance, the prices in stock markets tend to react to interest rate changes. A change in bank rates affects customers as it influences prime interest rates for personal loans.

Gross Domestic Product is the sum of all the goods and services produced within physical borders of a country in within a specific period of time.