Banks are often perceived as a money lending entity, but have you ever thought about how do Banks earn money? What is their Business Model? How do they provide you interest over your Deposits? What if all its customers want to withdraw their money at one time? I explain the economics behind how banks earn money and also explain some important concepts such as Cash Reserve Ratio (CRR), Statutory Liquid Ratio (SLR), Bank Run, Non Performing Assets (NPA), etc. in this video.
