Understanding Banking Operations

What is the primary goal of banks?

• To provide free services

• To make profits

• To lend money without interest

• To avoid competition

How do banks utilize the money deposited by customers?

• To buy real estate

• To donate to charities

• To invest in stocks

• To lend to other borrowers

What happens if many depositors withdraw their money at the same time?

• The bank will increase interest rates

• The bank will close all accounts

• The bank will lend more money

• The bank may not have enough cash to pay them

What is considered the most important factor for a bank's existence?

• Profit margins

• Trust

• Customer service

• Market share

What type of customers expect more services from banks?

• Students

• Company customers

• Individual customers

• Retired customers

What do banks charge for services that do not involve lending money?

• Exchange profit

• Loan income

• Fee income

• Interest income

What is 'exchange profit'?

• Profit from customer deposits

• Profit from selling currencies at a higher rate

• Profit from service fees

• Profit from lending money

What are the three main types of bank income?

• Loan income, Service income, Investment income

• Fee income, Investment income, Currency income

• Interest income, Fee income, Exchange profit

• Deposit income, Interest income, Service income

What is a challenge banks face due to increasing competition?

• More customer trust

• Easier profit generation

• Less need for marketing

• Difficulty in making profits

Why are banks interested in marketing?

• To reduce costs

• To expand their business

• To limit services

• To increase interest rates