I had applied for ICICI Bank PO Recruitment, and I was asked to explain the difference between banking and money lending, guys though I did my best but if you can provide some more details on it, will be useful for other candidates.
• A banking business is, however, distinct from a pure money-lending business. A money-lender usually advances his own funds.
• A bank accepts deposits from the public, which are withdraw-able by cheques, and the funds so accumulated are lent to its needy customers against goods or securities or by discounting bills.
• Further, the bank pays interest to its depositors, and the deposits are withdraw-able by cheques.
• Money lenders generally do not receive deposits from public, and even if they receive such deposits, it is not obligatory on their part to pay a uniform interest rate on such deposits; and these deposits are not chequable.
• Further, very often, when there is credit stringency, bankers may borrow from other banks or central bank to lend to their customers. Money-lenders obviously do not do so.