The correct option is Banks.
Explanation
Financial intermediaries are institutions that act as a middleman between two parties in a financial transaction, typically between those who have surplus funds (savers) and those who require funds (borrowers). The fundamental business model of a commercial bank relies on intermediation.
Analysis:
- Banks: Banks operate by accepting deposits from the public, on which they pay a certain interest rate. They then lend these funds to borrowers at a higher interest rate. The difference between the interest earned from borrowers and the interest paid to depositors is known as the "spread," which constitutes the primary income for the bank.
- Moneylenders: While moneylenders provide loans, they typically lend their own capital rather than mobilizing deposits from the public to lend out. Therefore, they do not operate on the deposit-lending spread model in the same institutional capacity as banks.
- Friends and Relatives: These are informal sources of credit. Transactions here are often not driven by profit motives or structured interest rate differentials.
- Employers: Employers may provide advances or loans to employees, but this is a welfare or contractual function, not their primary business as a financial intermediary.
Key Takeaway:
The defining characteristic of a bank under the Banking Regulation Act, 1949, is the acceptance of deposits from the public for the purpose of lending or investment.