What is Bank and Banking? : Introduction

In this series of Banking Basics, you will be able to grasp and know all of the following fundamentals of Banking such as Bank and Banking: Introduction, Origin, Definition, History, Features of Bank, Types of Bank, Role of Bank in economic development, How to open Bank Account, Advantages of Opening Bank Account, Cheque, Demand Draft, Types of Deposits: Fixed Deposit, Recurring Deposit etc.,

Meaning of Bank & Banking

A Bank is a financial institution that does the banking activity i.e., it deals with deposits & advances and other related services like lending money to grow the economy. Banks act as bridge between the people who save and people who want to borrow i.e., It receives money from those people who want to save as deposits and it lends money to those who want to borrow it. A Bank is a safest place to keep your deposit money like ‘piggy bank’ in which you store your money at home but only exception is money kept at banks will earn some money in the form of interest from the money you saved in bank. It is a safest place to deposit because as said earlier in a post named Make Sure Your Money is Safe , DICGC covers your deposit upto Rs. 1,00,000 in a single bank as guaranteed deposit under insurance coverage.

Banking can be defined as the business activity of accepting and safeguarding money deposits from individuals and entities called savers, and then lending out the same money to borrowers in order to earn a profit. Apart from these services, banking business activities have widened and in these days, Banks provide financial services such as Loans for car, home, education & business, Checking accounts, Debit & credit card services, Lockers, Fixed Deposits, Recurring Deposits, Electronic Banking like Automated Teller Machines / ATM services and Online/ Electronic fund transfer etc.,

Now-a-days, banking sector acts as the backbone & life blood of modern business because the money you deposited in bank will not be idle. It will grow by means of interest to your bank account & they will earn interest in return for lending out the same money to borrowers. This would ensure smooth money flow to develop our economy in positive approach.

Categories: Banking Basics, Tutorials