A Bank may be defined as an institution which is engaged in accepting deposits, sanctioning loans and providing other services to its customers and the general public.
As far as the functions of the Bank are listed it includes following activities:
i.
Acceptance of deposits - Bank accepts deposites (short-term to long-term or even recurring) on different conditions and accordingly pays interests.
ii.
Grant of loans - Bank lends money on the basis of deposits received. It may also allow overdrafts upto certain amounts to its regular customer with known antecedents without any deposits.
iii.
Acting as agents - in this capacity Banks renders useful services to its customer.
iv.
Miscellaneous services - a number of miscellaneous services are also rendered by Banks to persons who may or may not be regular customers. This may include making of drafts to getting foreign exchanges against valid documents as well as conversion of a foreign currency into Indian rupee, etc.
There are various types of Banks which are developed to cater the different segments of the society -
i)
Commercial Banks
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To help in industry and trade.
ii)
Agricultural Banks
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To assist agriculturalist with short term and long
term banks
iii)
Indigenous Banks
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To cater to the rival population and are largely controlled by individuals
iv)
Regional rural Banks
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To assist weaker sections of the rural population
v)
Exchange Banks
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These bear exchange for foreign trade.
vi)
Central Bank
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Which regulates the banking system
vii)
Development Banks
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They provide long term financial existence and for expansion and modernization of existing enterprises.
