What is a bank? What are the types of banks? Definition | Functions and powers of the bank

What is a bank? What are the types of banks? Definition | Functions and powers of the bank

What is a bank

The bank is a financial institution, which facilitates people to deposit and withdraw money. Loan facility is also provided to the needy. The purpose of setting up banks is not only to do business, but also to contribute to the economic development of the country. Usefulness of banks is also important for building society. The bank (BANK) is being described in detail in this article . The topics will also be highlighted on the types of banks and their working capacity. Read the article till the last to get complete information.

When did the bank start

Banks were started in India around 200 years ago. It originated in the British period. With the introduction of Bank of Bengal, people got a means to deposit their capital. The Bank of Bombay was established in 1809 and the Bank of Madras in 1840. In 1843 the three banks were merged to form the Imperial Bank. Subsequently, in 1955 the Imperial Bank was converted into the State Bank of India (SBI). Allahabad Bank was the first private bank in India to be nationalized in 1969. It was only after the establishment of Allahabad Bank that the system of opening of private banks started in India, which is still going on today.

Main functions of banks

Banks have many important functions. Its main purpose is to facilitate transactions to the people. Initially, banks had only the facility to deposit money. People used to deposit their money in banks to secure. Used to get them out of banks when needed. When money started accumulating in banks in a big way, under the Companies Act, banks were allowed to do business with these money. The income of the banks started increasing and then it was decided that the benefit of the income would also be given to the customers. After this, people started getting interest in exchange for their accumulated capital.

Loan arrangement through Bank (BANK)

After the business of banks increased, RBI decided to meet the needs of people with these money. They should be provided with loan facilities, so that people can use the money received in lieu of loans to build houses, create employment opportunities and also to get higher education. Not only this, the RBI also decided that 90 percent of the money deposited as profit in banks should be given in the form of loans to those who are financially weak. Large-scale loans have also been made for middle-class families. While the remaining 10 per cent of the amount is entitled to higher class. This amount is mainly given to establish industry or educational institutions.

Bank's (BANK) facilities

Banks are now providing various facilities to customers. These include money transactions, arranging loans, issuing credit and debit cards, setting up ATMs as well as online banking. Banks have reached the common people. Now there are very few people who do not have accounts with banks. Bank branches have also opened in rural areas, where large scale transactions are being done. Private banks also have a big role in this. In urban areas, due to private banks, people have got more facilities. Since people feel more secure in public sector banks, their credibility is also higher.


Locker arrangement by bank

Banks also provide locker facilities to their customers. More national banks in India have locker facilities. Customers can book a locker if needed. Important documents related to land and property are also kept in the locker along with expensive and precious jewelery ie jewelery. Insurance is also provided for security for the locker. There is a facility of insurance to compensate for any loss. Beam companies pay customers. However, due to the low number of lockers, it is not so easy to find. People have to wait after writing applications.

Money transfer facility in bank

Banks are also providing money transfer facility to their customers. People can transfer money from one bank to another. If someone has an account with SBI and is in another city for some reason, then money can be deposited through green card. Not only this, customers can also deposit money in other's bank accounts. This work can be done easily by staying anywhere in India. Banks likewise provide facility to their customers to issue checks and make DDs.

BANK keeps updating its customers

Banks also update customers. In cases involving money transactions, SMS is sent to the mobile number of the people. If someone has deposited money in someone's account, the information is sent via SMS. Similarly, withdrawal of money is also sent through SMS. People are also keeping updated through net banking. Minimum balance is reported through missed calls. Messages are also sent by banks on transactions through ATMs.

Type Of Bank

Banks in India operate with different styles. Banks are classified into different categories, which include Central Bank, Public Sector Bank, Private Sector Bank, Development Bank, Cooperative Sector Bank. In this way, these banks have different functions, their responsibility has also been fixed differently. The Reserve Bank of India monitors all the banks in India and also issues guidelines from time to time.

Role of banks

•    The Central Bank is directly governed by the Government of India. Guidelines are issued by the Central Bank to all types of banks. Guidelines for operation are issued.
•    Public sector banks usually work as an associate. They are also known as State Bank Group. It has 20 members.
•    Private Sector Bank includes N Active Foreign Bank of India, Old Generation, New Scheduled, New Generation, Scheduled Cooperative Bank.
•    Development banks call it, which usually does not transact money with the public. They are used for agriculture, trade, import-export, construction sector.

What is Cooperative Sector Bank

The work of cooperative banks i.e. co-operative banks is to create banking system in rural areas. Not only to provide transaction facilities to the people, it is also necessary to arrange loans for them. Most states in India have cooperative banks. There is also involvement of state governments in this. This includes State Cooperative and Central Cooperative Banks. However, the RBI has limited the scope of cooperative banks in many cases. Despite this, its people are getting its benefits.

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