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For a bank to survive without relying on liquidity measures like government intervention to save it, it must take advantage of several sources. Commercial banks get their money from various programs such as investment, credit interest rates and using their own bank fees and cards that they charge their customers.

By building up a pool of the large capital base made up of cash deposits, a bank may be able to invest the money in the meantime in profitable projects that have financial involvement in the bank and through The advertisement. Another most common standard in the conduct of business by commercial banks is to charge interest on loans which can generate a large profit ranging from one tenth of the amount loaned to double the amount or more in some long-term transactions. In special cases like loans that have a high risk value, especially those granted on an economically precarious basis, banks charge a high interest rate which will cushion the consequences of the credit in case of loss. In this way, a bank can make a high profit when the external factors remain the same and the customer pays back.

Finance charges like those involved in opening an account are some of the other ways a bank earns money. This is possible in a case where the commercial bank enjoys a large audience which, when other long-term security measures are ruled out, has little effect on the custody fees that accompany the deposit. Other fees include those contained in transfer fees and ATM fees for city dwellers who do not have access to the physical bank or are limited by time to get to the real bank. Banks may also offer money transfer services via mobile phones by including higher service charges than normal rates in the telecommunications industry.

By Jim Johannasen

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