Question 43
Financial InstitutionsTwo principal ways by which banks can lend money to their customers are through
- A.loans and overdrafts
- B.loans and discounting bills
- C.overdrafts and cheques
- D.overdrafts and treasury bills.
Show the answer and explanation
Answer: A (loans and overdrafts)
Explanation
Banks lend mainly by loans (a fixed sum) and overdrafts (permission to draw beyond the balance).