Shen Jin really couldn't figure out how to lend a sum of money to two people.
In his concept, borrowers provide collateral, they hand over the money to the borrower, and then wait to collect interest.
Or, the borrower is unable to repay the debt due to various reasons.
Then, they will naturally collect the collateral.
But no matter what, the money has to be lent out. You can't borrow money and not even give it to others, right?
If the person in front of him was not King Zhu Han of England, Shen Jin would even suspect that he wanted to use his power to rob the people of their wealth.
Not only Shen Jin, but also Liu Shenhong looked like he had seen a ghost.
The thoughts of these two guys were almost written on their faces, and it was difficult for Zhu Han to guess them.
He glared at the two of them fiercely: "What do you two little bastards mean? I am the kind of person who bullies good people?"
Even if they thought so in their hearts, they would never dare to admit it in front of Zhu Han, shaking their heads at the same time.
"Don't dare!"
"My lord, you are so wise and talented, so naturally you don't bother to do such a thing."
Zhu Han was very satisfied with the understanding of these two guys.
"Chen Jin, our Daming Bank has started to absorb depositors' funds, right?"
"Yes, Your Majesty, with the endorsement of the imperial court, many people are willing to deposit their money in our Daming Bank. At present, the country's savings are about more than ten million taels of silver." When it came to business, Shen Jin also put away his playful smile.
"According to your instructions, Your Majesty, we have not used any of this money."
This is Zhu Han's order. The biggest fear when setting up a bank is a run. Once depositors find out that they cannot redeem real money, the bank's reputation will be destroyed in an instant.
In order to avoid this happening, Zhu Han has already explained that they only need to absorb savings now and be familiar with all the procedures of bank operations, and do not need to make profits for the time being.
The money deposited in Da Ming Bank seems to be quite a lot.
In fact, these more than 10 million taels of silver would be pitifully small if spread over the entire Ming Dynasty.
After all, really rich people don't save their money in banks.
Nowadays, money banks require handling fees for depositing money.
The more they deposit, the more handling fees they pay. When they use banks, most of them are for the off-site exchange business of certain banks.
The largest number of ordinary people, that is, after the establishment of the Ming Dynasty, their lives were better than before.
He simply doesn't know how to deposit the little money he has in a bank.
At present, Daming Bank does not charge interest for deposits, and those who make deposits do not need handling fees for the time being.
Zhu Han frowned and thought for a while, then knocked on the table lightly: "Although it's a little unsatisfactory, the time is now considered ripe."
"Shenjin, starting from today, our Daming Bank will officially accept deposits from all over the Ming Dynasty Huaxia region."
"As long as you save money in our Da Ming Bank, you can get three percent interest every year. With at least one yuan of silver, you can open an account in our Da Ming Bank."
Shen Jin and Liu Shenhong were confused. Could it be that the prince had a fever and a fever today?
When others deposit money in Da Ming Bank, Da Ming Bank not only spends manpower and material resources on management, but also pays interest to the depositors.
"My lord, is this too...inappropriate?" Shen Jin almost said the word stupid.
Fortunately, at the critical moment, I changed my words in time.
"Your Majesty, although the interest of three cents is not much, it will still attract many people. When the time comes, more and more people will come to our Daming Bank to deposit money."
Zhu Han nodded slightly: "Yes, this is my purpose. This interest is to absorb as much deposits as possible."
…
The prince is really crazy, and Shen Jin is very worried.
Afraid that Zhu Han really didn't understand the key to this, he hurriedly explained: "Your Majesty, even if the interest is only two or three cents, if too many people make deposits, the interest will become an astronomical figure."
"And the prince even accepts deposits of one denarius. In this case, our operating costs will become very high."
"Although our loan interest rate is higher, Your Majesty, you have said before that the interest rate for our Da Ming Bank loan is only a mere 10%."
"Your Majesty, although the risk of lending is relatively small, it does not mean that there is no risk."
"Our purpose at Ming Bank is to cover the entire Ming and Huaxia mainland. With such a large stall, the possibility of problems is too great."
"If we not only have to bear operating costs every year, but also add bad debts and losses caused by various reasons..."
After a slight hesitation, Shen Jin gritted his teeth and said: "Daming Bank will most likely suffer losses."
"The bad guys think it is almost impossible to hide the news that the bank has suffered a loss. At that time, those big investors will definitely withdraw their deposits to avoid losses."
"As long as those large accounts start withdrawing money, someone will definitely follow suit. Once this situation spreads and leads to a frenzy of runs all over the world, our Da Ming Bank will be completely finished."
Shen Jin didn't care whether Zhu Han would be angry or not. He had put too much effort into Daming Bank.
In any case, I don’t want Daming Bank to be destroyed because of Zhu Han’s “incompetence”.
Zhu Han was a little surprised. This boy Shen Jin has a long-term vision. It seems that he underestimates this boy.
If he had not experienced the era of information explosion in later generations.
I'm afraid it's really not as good as this guy.
"What you said makes sense, but as I just said, why do you think Daming Bank will suffer losses?"
"It is true that any business in this world has risks, but banking is definitely one of the businesses with the least risk."
Seeing that Zhu Han didn't seem to be joking, Shen Jin gradually calmed down.
The creation of the Ming Dynasty Bank from scratch was indeed all the idea of His Royal Highness.
Many times, Shen Jin finds it unbelievable why His Royal Highness the King of England has so many fantastic ideas.
Logically speaking, it is impossible for someone who can come up with something like a bank not to know the risks involved. He is also concerned about it, but he is confused and dares to doubt His Royal Highness.
"I really can't figure it out, please give me some advice."
Zhu Han said with a smile: "Do you know why I, the king, do not hesitate to invest a huge amount of money to open the Ming Bank in every state capital of our Ming Dynasty?"
"Back to your lord, I understand. If our Ming Bank is spread all over the country, it means that those merchants can make deposits and withdrawals anytime, anywhere in the Ming Dynasty." Shen Jin replied decisively.
"Although those banks in the past also provided these businesses, however, due to some reasons, those banks were limited to a certain place or a few places, and they were not as convenient as our Daming Bank."
Shen Jin did not elaborate on the reasons. To put it bluntly, it was just a struggle of interests.
Zhu Han nodded slightly: "Yes, you can think of these, it shows that you also put your heart into it."
"Then let's assume another scenario. A businessman from Yingtian wants to come to Yanjing to do business. In the past, his money needed to be passed through two banks, but now it only needs to go through our Daming Bank."
"And the businessman here in Yanjing is about to go to Sichuan and Sichuan to do business. What will he do?"
"Your Majesty, if I were this businessman, I would naturally deposit this money into the Ming Dynasty Bank and take it out after arriving in Sichuan."
Zhu Han continued to ask: "What if this businessman from Sichuan and Sichuan happens to go to Yingtian to do business?"
Chen Jin thoughtfully said: "My lord, what you mean is that although this money has been circulating around our Ming Dynasty, for us, this money has actually remained untouched in Yingtian."
"For these businessmen, this is three pieces of silver, but here, in fact, as long as we have this amount of money, it is enough."
"The paper money you mentioned before is based on this principle."
Zhu Han shook his head: "Put aside the banknotes first, let's talk about depositing and withdrawing silver now."
"You are right about one thing. For those who save money, these are three pieces of silver. But in the process of operation, these three pieces of silver are only equivalent to one piece of silver. Do you understand now?"
Of course Shen Jin understood such a simple truth. The problem was that what His Royal Highness asked him to understand was obviously not something so straightforward.
This is how money banks operate nowadays, and it’s nothing unusual.
At least, there is no need to mention it specifically.
Seeing Shen Jin's confused look, Zhu Han also realized that what he said seemed a bit too profound.
He didn't realize how incompetent he was. Not to mention people of this era, even Zhu Han, a time traveler, was stunned when he first learned how the bank worked.
Smiling slightly, he explained patiently: "Didn't you realize that they didn't actually use silver in this process?"
Chen Jin's heart suddenly moved, and he vaguely seemed to have grasped some key. But if he thought about it carefully, it seemed that there was something behind him that he couldn't see or grasp.
He could only continue to stare at Zhu Han with pitiful eyes, hoping that Zhu Han could clear up his doubts.
He could even vaguely feel that what His Royal Highness was about to say next was absolutely extraordinary.
"Shen Jin, these merchants seem to be trading in silver. In fact, they didn't touch a single tael of silver during the whole process. So, what these people are using is essentially the reputation of our Da Ming Bank."
"If most merchants across the country are using the deposit and withdrawal business of our Da Ming Bank, only part of the money they are actually using is actually in our bank."
"Only in a few special circumstances, they will withdraw all the money."
"Let me take a businessman as an example. If he deposits one hundred taels in a bank, before the merchant withdraws the money, the bank's biggest profit, besides handling fees, is to lend out the money and charge interest."
"And our Daming Bank..." A smile appeared on the corner of Zhu Han's mouth.
He had an inexplicable excitement of opening Pandora's box.
"If a businessman saves one hundred taels, most of the time he will only use part of it, such as twenty taels. Then at this time, we can lend out eighty taels of it as a loan."
Zhu Han's statement seems to be no different from the banks that Shen Jin mentioned before.
But Chen Jin's eyes became brighter and brighter, his heartbeat accelerated, and his mouth went dry.
He knew that the real point was coming.
Sure enough, Zhu Han said again: "Let's just assume that the person who borrowed the money is also a businessman. He may have borrowed money because he has taken a fancy to some business and needs a sum of funds temporarily."
"Then, he won't withdraw all the money, because the people doing business with him also have business in our Da Ming Bank. Therefore, most of the money here is still in our Da Ming Bank."
"Of these eighty taels, this businessman will use twenty taels for other purposes. But the remaining sixty taels are at our discretion at the Ming Bank..."
hiss……
Chen Jin gasped, and Tong Kong shrank violently...
Now, he could even clearly hear his heart beating like a drum. He didn't know when his clothes had been soaked with sweat.
It turns out that this is what it means to lend a sum of money to two people.
Shen Jin even thought of more.
When His Royal Highness gave the example, he deducted part of the money at the savers' own disposal.
But Shen Jin knows that in actual operation, this is not necessary at all.
Because when a sum of money goes out, more money will definitely come in.
As long as the bank can set aside some funds, it doesn't matter if the one hundred taels of silver are lent to as many people as they want.
No wonder the prince wants to pay interest to those who save money.
Because the more people who save money in Daming Bank, the greater the room for manipulation.
Those who save relatively small amounts of money are also extremely important to banks.
Because these people are really saving money, they may not touch their money for several years.
Even if the number of these people's savings is small, they can't handle the large number of them.
The Ming Dynasty now has more than 200 million people. As long as each person saves one coin, it will be more than 20 million taels.
With so much fixed silver reserves, there is no need to worry about thunderstorms.
When Zhu Han saw Shen Jin's appearance, he knew that he understood what he meant.
He said approvingly: "This method I control is called leverage."
Shen Jin swallowed hard. When Zhu Han set the loan interest rate of Daming Bank, Shen Jin also lamented that his prince was too kind-hearted.
One penny is an interest rate of 10%. If it were given to future generations, it would definitely be an interest rate that would make people curse to death.
But in this day and age, it's the same as not paying interest.
Three points of profits are extremely conscientious.
Now Shen Jin understands that this is worse than loan sharking.
Those black-hearted loan sharks can only lend a sum of money to one person no matter how high they set the interest rate.
As for Daming Bank, if the same amount of money is loaned out several times, the interest charged will be higher than that of a loan shark.
Lending money at a high interest rate is unethical, and many people are scolded by them.
And they...
People who borrow money from Daming Bank will actually be grateful to them.
"This... is simply... easier than robbing money..."
Shen Jin was already shocked and speechless.
As for Liu Shenhong, who had listened to all this with him, he seemed to be motionless with his mouth open.