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What is financial intermediation? Briefly explain and give an example

What is financial intermediation? Briefly explain and give an example

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Answer-Financial intermediation is the process of intermediation of funds or something which is financial or having a monetary value in nature in which there is the process of accepting funds from one entity and lending those funds to the another entity which includes some interest rate on an amount is called financial intermediation.

For example -A commercial bank accepts the deposits from the depositors and after creating some required reserves from that amount they lend that amount to the lenders or who requires loan.

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