Banks' profits are provided not only from interest, but also from operating income and commission fees.
The statement came from Ilgar Tagiyev, a leading adviser to the World Bank and the European Bank for Reconstruction and Development.
Some people think that they repay the loan on time and avoid paying interest without delay. So how does the bank make a profit in this case?
Ilgar Tagiyev said that first of all, banks sell credit cards to customers for a certain amount, on the other hand, the bank earns a commission every time a customer performs a certain transaction:
"When withdrawing money from e-commerce transactions or ATMs, the customer pays a certain commission. In fact, some banks give their customers a delay of 30-40 days. Sometimes, the bank is able to compensate itself, as the amount of commission withdrawn from ATMs is close to one percent per month.
That is, the customer is actually told that you do not pay any interest when you use the loan for 30 days. However, when you use these loans, you carry out certain operations and the bank charges a commission for these operations. This is sometimes more than or equal to a month's interest. In other words, the customer does not feel it or this amount remains a hidden expense for him. On the bank side, this is a profit. Even if the customer does not delay the payment of the amount, it should be borne in mind that the bank's profit is not only interest. The bank's profit is also provided by operating income and commissions from operations.
He added that on the other hand, there are installments, in which case the banks receive the commission from the other side:
"That is, not from a customer, but from a store where the customer is shopping. The process is as follows: The bank directs the customer to the store and receives a certain income in return. Figuratively speaking, he puts money in the customer's pocket and sends it to the store. Since the customer actually buys cash from the store, this sale is considered cash for the store. Thus, the store pays a certain amount to the bank and the bank receives income from it.
It should be noted that Azerbaijani banks have been implementing the installment card system since 2012.
NEWS TAPE
Remember to drink these teas when you have a cold
The name of the most influential country in the world has been announced
This creature will surprise everyone
Armenians fire on Tartar and Agdam - OFFICIAL
Distance education extended in Azerbaijan - DECISION
Images of Chukhurmahla village of Aghdam - VIDEO
Hikmet Hajiyev: "We assess Armenian provocation in Ganja as an act of genocide"
Armored vehicles of Azerbaijani army taken to Agdam - VIDEO
MoD: "As a result of our army's strikes in the direction of Aghdam, the enemy left its positions with losses"
Commemoration of Azerbaijani martyrs - VIDEO
The British army refuses tanks
"It's the best way to protect against the virus," said Hande Harmanci
Action in support of the Azerbaijani army in Tabriz: "We are ready to die" - VIDEO
Arif Malikov's work was performed at a festival in the United States
The effects of life's challenges on us
When vaccination will start in Azerbaijan ANNOUNCED
Maxim Shevchenko is coming to Baku to take part in the Victory Parade
Are Alla Pugacheva and Maxim Galkin getting divorced?
Trump promised: The vaccine will be delivered to all parts of the country within 24 hours
The mistake in the series "Kefaret" was discussed on social networks - PHOTO
Haber Global has prepared a story about the martyred Colonel Babek Samidli - VIDEO
Coronavirus victims commemorated in US in interesting way - VIDEO
STP appealed to legal entities and individuals for technical inspection
Jennifer Aniston's diet to lose 10 kilograms
Cafes and restaurants are preparing to open in Baku after a long time - VIDEO REPORT
Nurgul Yeşilçay ridiculed the famous brand
Family photo prompted the woman to lose 38 kilograms
Unexpected reaction from Yilmaz Mörgül
The country has a population of over 80,000 over the age of 100
A diplomatic scandal has broken out between Turkey and France
Dog gives milk to motherless calf - VIDEO
From Recep Tayyip Erdogan to the Azerbaijani army: "Happy victory!"
The enemy is shelling our settlements - OFFICIAL
Elon Musk refused to be vaccinated against coronavirus
Unexpected offer from professor: "Weddings should be allowed"
There will be interruptions in the supply of drinking water in two districts of Baku
Biden won the presidential race in the United States
The deadly nature of the coronavirus has been revealed
STATEMENT from the Russian Minister: We do not sell to anyone
Insects made of paper
A spokesman for the Defense Ministry issued a statement
Why do pets need a document?
President: "It was said to liberate five districts, we already have four of them"
GOOD NEWS about pensions: On September 15 ...
A new Foreign Minister has been appointed in Armenia
The last registration date for pre-school groups has been announced
"Crumble" (photo-recipe)
The last VIDEO taken by the people who were hit by a mine in Fizuli region before their deaths
Four more people died of coronavirus in Azerbaijan every day: 331 new infections
What is burnout syndrome? - Symptoms