Question

Q3. In thrift banks in USA, the structure of income has been changed because the intermediation role is no longer the main source of income, discuss this statement and explain the structure of income of banks in Saudi Arabia.

Answer 1

Thrift banks are those banks or financial institutions which focuses primarily on taking deposits and loans originating from mortgaging of homes etc. They are neither commercial banks not charity institutions. They are small banks focussed more towards a particular community.

From the statement we infer that thrift banks have started to play a more significant role than just being a intermediary bank. This has led the banks to earn more income which has helped the bank to be more stable.

Saudi Arabian banks are controlled by the Saudi Arabia Monetary Authority (SAMA) which is not n the direct control of Kingdom of Saudi Arabia. The income of banks are majorly from exports of oil reserves. Saudi Arabia is one among the top countries with highest natural resources that has made them a atop performing economy. The income is mainly from exports and imports which forms the backbone of the economy.