Money and Currency

Bank (Definition, Origin, Meaning, Types)

Banks are those types of financial institutions that provides various types of services to individuals, organizations, business and government. All total  Banks in all over the world plays a important role in the economy of all countries by facilitating the flow of money and providing a wide range of all various types of financial products and services. Bank is a place where most of peoples deposit their money for safekeeping and access it when needed.

When you deposit money into a bank, it becomes a part of your account balance, which you can use to make withdrawals, write checks ,or conduct electronic transactions. One of the main functions of all total banks of the world is to accept deposit. This includes saving accounts, checking accounts, and certificate of deposit (CDs). Savings account typically offer low interest rate, while checking accounts are designed for frequent transactions. Certificate of deposit (CDs) offer higher interest rates but require you to keep your money deposited for a specific time period.

All the total  Banks of the world also lend money to individuals, organizations, business and governments. When you take out a loan from a bank, you are borrowing money that you agree to payback with interest over time.

Another important function of bank is to facilitate payments and transactions. This includes issuing the debit and credit cards, processing electronic payments and providing wire transfer services. Banks also offer many types of services and facilities such as cashier checks and money orders, which can be used for larger transactions or when a more secure form of payments is required. Banks also plays an important role in managing risk and providing financial advice. Banks also offer many types of services such as insurance, investment management, and retirement planning to help individuals and business protect and grow their wealth. Banks are essential institutions that provide a wide range of financial services to individuals, organization, business and governments.

Origin Of Banking System

Banking transaction have been taken place from many previous years. According to some evidences it is said that the banking system was prevailing from the time of ( Babylon) named culture. According to some historical evidences it is said that in the year 1171, the authorities of Venice had a taken a loan from the citizens for meeting. The expanses of wars and the arrangement of repayment were also made by the authorities. The loan that is taken by the authorities of Venice from the citizens called ‘Mot’ in language of Italian country. The proper and full meaning of word ‘Mot’ in Italian language is Bank. At this time the German rule was also in mostly parts of Italy. After sometimes the World Bank is also called ‘Banco’ in Italian language. The means of German word banks is joint stock fund. The bank word war changed into Banco when the German country were masters of a great part of Italy. After sometime time the Word ‘Bank’ is also used in France and England. After the time of year 1646 the Word ‘Bank’ has been used in the mostly articles. There are many banks starts from the name of banks. According to many intelligent philosophers of the world the Italian word ‘Banco’ means table. In ancient time the moneylenders used banking transactions by keeping money in the banks.

Meaning of Banks

Banking is an integral and most important part of the modern time. The naturality and functionality of modern banks have evolved over a very long period of time. The Word ‘Bank’ is derived from the two Latin words ‘ Bantus’ and Venue’ whose means in English language is ‘Bench’. The idea of banking system evolved with the idea of money.
In old days according to some intelligent authorities of the world the word ‘Bank’ was totally derived from World Bank of German. After sometimes the World Bank was also known with the name of ‘Banco’ in Italy when most of a part of Italian country was ruled by Germans. Bank is a type of financial institution that deals with deposit and advance or many types of other related services and facilities. Banks are received money from those persons who want to save their money in the form of case deposit in banks , and it lends money to the customers when need it. All total banks of the world provide many type of facilities and services to their customers and peoples such as case deposits facilities, case withdrawal facilities, credit card, debit card, personal loans, home loans, gold loan, and other many types of facilities and services provides. All the total banks of the world are also plays a significant and important role in the economy of a country.

Types of Banks

Banks are divided into many types of categories such as Central Banks, Clearing Banks, Commercial Banks, Community Banks, Cooperative Banks and other many types of banks given below with their types and definitions.

  1. Central Banks

Central banks are those types of banks that are the primary monetary authorities of a country or group of countries in all over the world.  Central banks are also responsible for overseeing the nation’s monetary policy and regulating the financial system to achieve economic stability and growth. The main works of Central banks are to control the supply of money and credit in the economy through many ways such as setting interest rates, regulating banks’ reserve requirements, and conducting open market operations.

  1. Clearing Banks

Clearing banks are financial institutions responsible for  providing the clearing and settlement of financial transactions between banks and their customers. Clearing banks also plays a significant and important role in the  strong operation of payment systems by processing checks, electronic funds transfers (EFTs), and other payment instruments.

  1. Commercial Banks

Commercial banks are those types of financial institutions that provides a wide range of services and  facilities  in the comparison of retail banks. Commercial types of  banks also  serve both individual customers and large corporations or businesses. Commercial banks provides many types of banking services and facilities such as, savings and checking accounts, commercial banks provide more financial services in comparison of other banks  such as business loans, trade financing, treasury services, and investment banking services.

  1. Community Banks

Community banks are locally owned and operated financial institutions types of banks that focus on serving the banking needs of individuals and businesses within a specific geographic area or community. These banks are works only on low level works not on larges works. These types of banks have lower branches in comparison of other larger national or international banks.

  1. Cooperative Banks

Cooperative banks are those types of financial institutions that are owned and operated by their members, who are typically individuals or small businesses that use the bank’s services. These types of banks are also operates on a cooperative basis, meaning profits and decisions are shared among members. Cooperative banks are also provides many types of services and facilities  , such as savings and checking accounts, loans, and investment options and other many types of services.

  1. Credit Unions

Credit unions banks are non-profit financial cooperatives types of banks that are owned and operated by their members, who share a common bond such as employment in the same industry or residing in the same community. Unlike banks that are profit-driven, credit unions operate under the principle of mutual assistance and serve the financial needs of their members. Credit Unions banks provides many types of services and facilities  such as retail banks, including savings accounts, loans, and other financial products.

  1. Development Banks

Development banks are long-term financial institutions that provide long-term finance for economic development projects. Development Banks  provides many services like as others banks such as loans, guarantees, equity investments, and technical assistance to projects in sectors such as infrastructure, agriculture, industry, and small business development.

  1. Digital Banks

Digital banks are operates by online or through mobile applications, without physical branches. Digital banks offers many types of banking services such as  savings accounts, loans, and payment services, leveraging technology to provide efficient, user-friendly experiences.

  1. Ethical Banks

Ethical banks are also known with the name of   sustainable or green banks.  Ethical banks also invest in works and businesses that promote sustainable development, ethical practices, and community well-being.

  1. Industrial Banks

Industrial banks are also provides many facilities and financial services to industrial companies, industrial  organizations  including financing for equipment, machinery, and other capital investments.

  1. Internet Banks

Internet banks  also known with the name of online banks or virtual banks.  Internet banks are operates by digital platforms.  Internet banks also provides a wide range of banking services such as deposits, loans, and transfers online or via mobile apps.

  1. Investment Banks

Investment banks are experts  in providing financial services and facilities to customers, corporations, governments, organizations, and institutional investors. Investment banks also offers many types of facilities and  services such as underwriting, mergers and acquisitions (M&A) advisory, securities trading, asset management, and investment research.

  1. Islamic Banks

Islamic banks are also operates   according to Sharia law.  Islamic banks also offers a wide range of  financing  services such as  profit-sharing arrangements (mudarabah), leasing (ijara), partnership (musharakah), and trade financing (murabaha).

  1. Land Mortgage Banks

Land mortgage banks are also term banks because they focuses  on providing long-term loans for purchasing agricultural land or making improvements to agricultural properties. Land Mortgage Banks are specialists in  financing for farmers and landowners, offering loans with extended repayment periods and competitive interest rates tailored to the agricultural sector.

  1. Merchant Banks

Merchant banks are specialists in providing financial services primarily to companies, corporations, organizations  and businesses. . Merchant Banks also  offers a wide range of services such as corporate finance, advisory services, underwriting of securities, mergers and acquisitions (M&A) advisory, and international trade financing.

  1. Multilateral Development Banks

Multilateral Development Banks (MDBs) are those type of financial institutions that are formed by many countries of the world  to provide financial and technical assistance for development projects in developing countries. There are many organizations  includes such as  the World Bank, Asian Development Bank, and African Development Bank.

  1. Offshore Banks

Offshore types of banks are located in jurisdictions with favorable tax and regulatory environments, often referred to as offshore financial centers (OFCs). These types of banks offers a wide range of  financial services to non-residents, including individuals and corporations, seeking tax efficiency, asset protection, or confidentiality.

  1. Payment Banks

Payment banks main purpose is focus on providing basic financial services, such as deposits and payments. Payment banks are typically operates by  mobile and electronic platforms.

  1. Postal Savings Banks

Postal savings banks are financial institutions that are related and connected with national postal systems. Postal Savings Banks  offer many types of banking services such as  savings accounts, payment services, and sometimes loans.

  1. Private Banks

Private banks are those types of  financial institutions that are not operates by government but also operates by local persons, organizations, and companies. Private Banks also offer banking and wealth management services to high-net-worth individuals (HNWIs) and wealthy families.

  1. Retail Banks

Retail banks are those types of banks in which  most of peoples are familiar with on a daily basis. All total retail types of banks in whole world  provide many types of facilities and services directly to individual customers and small businesses organizations, and companies. Many types of different-different services includes such as, savings and checking accounts, loans (such as mortgages, personal loans, homes loans, gold loans and car loans), credit cards, and basic investment products.

  1. Savings Banks

Savings banks are those types of financial institutions that main work  to  accept savings deposits and offer a wide range of  financial services to individual customers. Savings banks also provides a wide range of banking services such as savings accounts, fixed deposits, personal loans, and mortgages.

  1. Shadow Banks

Shadow banks are those types of financial institutions that provide credit and other financial services outside the regular banking system. They include hedge funds, money market funds, and certain investment banks.

  1. Wholesale Banks

Wholesale banks, also known with the name of corporate banks or business banks. Wholesale banks offers a wide range of financial services such as corporate lending, trade finance, treasury services, and investment banking products.

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Anil Saini

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