The Tucana Bank of Commerce pools customer deposits and uses the funds to make loans to businesses and households.These businesses and households,now known as the borrowers,pay the bank interest,and the bank,in turn,pays depositors interest for the use of their money.Which of the following would best describe the process used by the bank?

Question

Quizplus · Accepted Answer

The bank is utilizing an indirect transfer process, where it takes deposits from customers and then lends those funds out to borrowers. This process involves the bank acting as an intermediary between depositors and borrowers, with interest paid by borrowers being used to compensate depositors who provided the funds.

The Tucana Bank of Commerce Pools Customer Deposits and Uses