Through this beginners guide video, I try to break down how do banks make money, starting from its interest income, interest expense, deposit funded loans, non-interest income it earns on ancillary services. 

 

A bank is a very important but highly misunderstood institution. You can't possibly avoid dealing with them, either through their branch, on phone, or increasingly online. Banks do it all - from parking your hard earned savings, disburbing a loan to fund your education, help you buy a house, or maybe to safekeep your precious jewellery. 

 

Inspite of the central role played by banks in modern society, it is bizarre how little we know about them! Understanding their basic working can go a long way in making sense of our economy and the financial system.

 

Do check out the next episode which lays the ground to understand the different types of bankings institutions out there, and how each plays a vital role in our economy.