Essay On Bank
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| Essay On Bank |
Banks are financial institutions that deal in monetary transactions. Banks are an integral part of any society. There are many banks located in different parts of our country. Though earlier India had a limited number of banks with few branches in major cities and towns, in the last few decades many new banks have opened branches in every nook and corner of the country.
Preface
Banks are financial institutions that lend money to the general public and accept their money for deposit. Banks maintain the flow of money in the country and the partners are also important for the economic development of the country. There are different types of banks that provide a variety of services to individuals as well as businesses.
types of banks
Here are the different types of banks and their functions:
National / Rashtriya Bank - Apart from this name, these banks are also known as Central or Federal Bank. These banks manage the financial system of the government. These non-profit organizations serve as bankers to other banks. Every country has a Central Bank. Some of the functions of national banks include monitoring foreign exchange, controlling a country's currency, and issuing paper currency. They do not deal with the general public.
Retail Banks - This is the most common type of banks. These are generally established to focus on the needs of the general public. These banks open savings accounts, provide credit cards, provide loans and provide locker facilities, among other services.
Savings Banks – These are specially established to inculcate the habit of saving money among the people. In these banks the money deposited from the customers is converted into securities and bonds. These were established in European countries back in the 18th century. Apart from this, these banks also provide many other services by accepting public deposits.
Commercial Banks - The main objective of these banks is to help the business class. They provide loans to the traders and also provide them other services which are useful to the business men. Some of these services include bill exchange, overdraft and check collection.
Investment Banks - These banks are also set up to help businesses. With the help of these banks, traders have established a foothold in the financial markets. Investment banks facilitate businesses that need to sell debt to investors or want to obtain money from the general public for their businesses.
Land Mortgage Banks - These are also known as Agricultural Banks or Land Development Banks. Primarily it has been established to help the agriculture sector by financing it. These banks also play an important role in land development. The reason banks fall into this special category is that financing the agriculture sector involves a lot of risk and commercial banks supporting other businesses are unwilling to take such risks.
Cooperative Banks - Cooperative Banks provide loans to small farmers, small businesses and salaried people. They provide commercial and retail services to the people. These banks are registered under the Co-operative Societies Act, 1912.
Consumer Banks – These banks are specially set up to provide loans for buying durable consumer goods like cars, washing machines, refrigerators, furniture etc. These banks give their customers the benefit of repaying the loan in easy installments. These are mostly found in other countries.
Industrial Banks - They are also known as Development Banks. These banks have been established to help the industrial sector. These banks accept cash money by issuing shares and debentures. These banks provide long-term loans to industries to help them expand and grow. After independence many such banks have been established in the country.
Exchange Banks - These banks work exclusively for financing foreign trade. Some of the main functions of these banks include discounting of foreign bills, sale and purchase of silver and gold, and providing assistance in carrying on export and import trade.
conclusion
Banks are established to ease the financial issues of the general public as well as the whole country. Different types of banks serve different purposes and have been established to meet the needs of different sections.
