Quote from: Yatsan on June 11, 2023, 03:20:11 PM

Quote from: dansus021 on June 11, 2023, 10:53:20 AM

Quote from: nesty on June 07, 2023, 01:45:44 PM

Banks generate income through different product and services like one of the primary ways is by lending money to customers at a higher interest rate than the rate at which they borrow money from other banks or the central bank. The difference in interest rates, known as interest rate spread allows banks to earn a profit on the loans they make. Banks also charge fees for various services such as account maintenance, ATM usage and wire transfer. Banks may invest their own funds in various financial instruments such as stocks, bonds and real estate to earn a profit on their investment. Some banks generate income by providing advisory services to clients or by offering insurance products.

Number one of their income is obviously lending Grin

it could be lending to other bank like credit suisse case or lent to other people, a company or government project or lend their money to the government bond. the point is they generated money from lending. and that is pretty much 90% i think Grin

Another things is through transactions, you are not giving the service for free. But biggest source indeed is through lending or loan (in my area). It allows the bank to make their funds revolve around their users with monetary interest. It is the nature of centralization which made this possible and if we would compare it from this technology then there's a huge difference with how money flows. As we all know, banks have plenty of users which is considered aspect of bank. In this industry as well but centralization and decentralization are far from one another. As ive read in the replies, banks has the weath and all but due to centralization, they are also liable withnegative tendencies such as losses.

The interest they give to every loan is somwtimes actually high that it really gives them a big time profit and earning. Imagine not paying in time would give you an extra payment? That's how they generate money plus I don't know if some bank literally have connections in each other because if you use other bank's atm it will cost you too much fee since the bank you have is not available in some places so you have no choices but to use other bank that will cost you too much transactions fee from my experience. This is centralized work that's why most of the people prefer to use decentralized system.