Lesson 3 of 5
How do Banks Work?
🎯 In this lesson you'll learn:
- •Learn what a bank does with your money
- •Understand why banks are safe places to keep money
- •Discover how banks earn money
Kabir's Bank Visit
Kabir went to the bank with his dad. He saw a big building with counters, computers, and a safe door that looked like a movie vault.
"Where does my money go?" Kabir asked.
His dad smiled. "When you deposit money in a bank, the bank keeps it safe for you. And here's the cool part — the bank also lends some of that money to other people. Those people pay the bank back with a little extra called interest."
"So my money helps other people?" Kabir asked.
"Yes! And the bank pays YOU a little extra too for letting them hold your money."
Why Keep Money in a Bank?
Imagine keeping ₹5,000 under your mattress. What could happen?
🐕 Your dog might chew it 💧 It could get wet and ruined 🔥 There could be a fire 😴 You might forget where you put it
But in a bank? It's locked in a vault, counted carefully, and protected. Plus, banks in India are regulated by the RBI (Reserve Bank of India) — the boss of all banks!
India's RBI
The Reserve Bank of India (RBI) makes sure all banks play fair. If a bank goes broke, there's a special rule that protects your money up to ₹5,00,000! That's why banks are the safest place to keep your savings.
Quick Check
Score at least 60% to complete this lesson.