What Is Banking ? Definition, Types, Function and More
A banking is a financial institution that accepts deposits from the public and creates a demand deposit while
simultaneously making loans.
It can also be define as financial institutions that provide loan or save customers money. The term Bank is derived from the word “Banc” or Banque
which means a bench upon which the ancient day financiers would display their coins or transact their business in the marks space.
Banks are very important in the society and also located in different parts of the countries and deal directly with the general public.
They provide many services on customer based on the different requirements and they provide lockers, ATM Services, money transfer and other monetary services.
Banks provides many services that boost the economic development of the country.
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Banks play an important role in financial stability and economy of a country, most jurisdictions exercise a high degree of regulation over banks.
Types Of Bank
Commercial Bank: These maybe government owned private bank, it is a financial institution that accepts deposits, offers checking account services.
They also make various loans and they make saves accounts to individuals and small business.
Exchange Banks: this finance the internal trade of the country, they finance the moment of goods from one commercial center to another.
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They advance loans to traders and discount their bills of exchange.
Land Montage Banks: Its a land development bank, is a special kind of bank in India and is of quash commercial all type that provides services such as accepting deposits, making business, loans and offering basic investment products.
Central Bank: Is a financial institution given privileged control over the production
and distribution of money and credit for a nation on a group of nations.
Savings Bank: is a financial institution that gathers savings, paying interest on dividends to savers.
It is a financial institutions that receives savings accounts and pays interest to depositors.
Indigenous banks: It is a banking that involves private forms or individual who act as banks by providing financial services such as loans and accepting deposits.
Regional Rural Bank: Is a government owned scheduled commercial banks of India that operate in different states of undid.
These banks are under the owner ship of ministry of finance, government of India. They were created to serve rural areas with basic banking and financial services.
Functions Of A Bank
The important function of a bank is to receive deposits. These deposits are received as fixed deposits, which have a limited time frame. It is also a place we save money.
- Bank is to lend money through cash credits or loans, overdrafts or discounting bills.
- They charge a higher interest rate while giving money.
- A bank helps people to have the habit of saving and provides safe custody.
- It collects bills, drafts, cheques and grants credit facilities and loans to people.
- Its also sells and purchase stocks, shares etc.
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