Commercial banks are funded through which of the following? a. customer deposits b. stock holders c. government funding d. services

Commercial banks are funded through customer deposits (A). Customer deposits are gotten from commercial bank’s services such as checking account services, offering basic financial products, and making various loans.

EXPLANATION  :

Commercial banks earn money from services such as offering loans and earning income from the loan. Commercial banks’ types of loans are various. It may include auto loans, mortgages, personal loans, and business loans. Such a commercial bank might run the business in just one or several types of those loans.  

To be able to offer various loans, commercial banks benefit from customer deposits such as CD’s, checking accounts, and savings accounts. The customers who save and deposit their money, actually the same to lending money to the bank with interest as the payment or rewards. Nevertheless, the interest rate paid by the bank for the money they borrow from the customers is less than the rate charged on the money they lend.  

If you are curious about commercial banks source of fund, here are some products offered by the banks to collect customers deposits:

•Project finance

•Industrial loans

•Leasing

•Foreign trade financing

•Syndicated loans

•Bill of exchange

•Debit cards

•ATM cards

•Traveler’s cheques

•Home quality loans, and many more.  

LEARN MORE  

If you’re interested in learning more about this topic, we recommend you to also take a look at the following questions:

1.The difference between the function of Central Bank and commercial bank?  

2.The federal Reserve Bank of the United States is also knowns as the?  

KEYWORDS: Commercial bank’s fund, commercial bank’s funding  

Subject:  Business

Class: 10-12

Subchapter: Commercial bank’s fund