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What is a Traditional bank? Introduction, Explanation and Top features of Bank Post: Gaurav Akrani Date: 2/09/2011 10: 12-15: 00 I AM IST
Remarks (4) Brands: Banking
What exactly is Bank? Intro в†“
Finance is the your life blood of trade, commerce and market. Now-a-days, financial sector will act as the spine of modern organization. Development of any kind of country primarily depends upon the banking system. The term financial institution is either based on old Italian word banca or coming from a French phrase banque equally mean a Bench or perhaps money exchange table. In olden days, Western european money loan providers or cash changers used to display (show) coins of numerous countries in big tons (quantity) about benches or tables with regards to lending or exchanging.
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A bank is known as a financial institution which in turn deals with deposits and advances and other related services. This receives funds from people who want to save in the form of deposit and this lends funds to those who need it.
Meaning of a Financial institution в†“
Oxford Dictionary specifies a traditional bank as " an business for custody of the children of money, which usually it pays out on customer's purchase. "
Characteristics / Features of a Financial institution в†“
1 . Dealing in Money
Bank can be described as financial institution which deals with other's money we. e. funds given by depositors.
2 . Individual / Organization / Firm
A lender may be a person, organization or a organization. A financial company means a company which is in the business of banking.
several. Acceptance of Deposit
A bank accepts money in the people in the form of deposits which are usually repayable on demand or after the expiry of any fixed period. It gives security to the debris of it is customers. Additionally, it acts as a custodian of cash of its customers.
four. Giving Advances
A traditional bank lends away money in the form of loans to those who have require it several purposes.
a few. Payment and Withdrawal
A bank supplies easy payment and drawback facility to its buyers in the form of cheques and drafts, It also delivers bank money in circulation. This kind of money is in the form of cheques, drafts, etc .
6. Company and Power Services
A bank supplies various banking facilities to its customers. They incorporate general utility services and agency solutions.
7. Revenue and Service Orientation
A bank is actually a profit in search of institution having service oriented approach.
almost eight. Ever increasing Functions
Banking is definitely an major concept. There is certainly continuous growth and diversity as regards the functions, providers and activities of a bank.
9. Attaching Link
A bank acts as a connecting website link between consumers and loan providers of money. Financial institutions collect money from those who have surplus money and give a similar to those who are in need of money.
10. Bank Business
A bank's key activity should be to do business of banking which should not always be subsidiary to any other organization.
11. Name Identity
A bank should always add the term " bank" to thier name to enable visitors to know that it is a bank and that it is dealing in money.
Reserve Lender of India (RBI)
The central bank from the country is the Reserve Lender of India (RBI). It was established in April 1935 with a reveal capital of Rs 5 crore on the basis of the tips of the Hilton Young Commission. The talk about capital was divided into fully paid shares of Rs 100 every, which was completely owned by simply private investors in the beginning. The federal government held stocks and shares of nominal value of Rs 230, 000. The RBI commenced operation about April one particular, 1935, beneath the Reserve Traditional bank of India Act, 1934. The Take action (II of 1934) supplies the statutory basis of the performing of the Lender. The Bank was constituted to fulfill the following requirements: Regulate a defieicency of currency remarks
Preserve reserves expecting to to securing monetary stableness Operate the credit and currency approach to the country to its edge Functions in the RBI
The Arrange Bank of India Act of 1934 entrusts each of the important features of a central bank with the...