Академический Документы
Профессиональный Документы
Культура Документы
Introduction to Banks
Banks have developed around 200 years ago. The natures of banks have changed as
the time has changed. The term bank is related to financial transactions. It is a
financial establishment which uses, money deposited by customers for investment,
pays it out when required, makes loans at interest exchanges currency etc. however to
understand the concept in detail we need to see some of its definitions. Many
economists have tried to give different meanings of the term bank.
While defining the term banks it is taken into account that what type of task is
performed by the banks. Some of the famous definitions are given below:
According to Prof. Sayers, "A bank is an institution whose debts are widely accepted
in settlement of other people's debts to each other." In this definition Sayers has
emphasized the transactions from debts which are raised by a financial institution.
According to the Indian Banking Company Act 1949, "A banking company means
any company which transacts the business of banking. Banking means accepting for
the purpose of lending of investment of deposits of money from the public, payable
on demand or other wise and withdraw able by cheque, draft or otherwise."
The minister also said that till July 31, the state-owned Bharat Sanchar Nigam Ltd (BSNL) has covered
all district headquarters and 33,620 cities with GSM (Global System for Mobile communications) based
cellular services.
About 579,486 villages, over 97 percent of the census 2001 inhabited revenue villages, have been
covered with telephone connectivity through village public telephones.
Shared mobile infrastructure scheme has been launched by universal service obligation fund to
provide subsidy support for setting up and managing 7,353 towers in 500 districts and over 27 states
for provision of mobile services in the specified rural and remote areas.
Villages or cluster of villages having population of 2,000 or more and not having mobile coverage were
taken into consideration for installation of the tower under this scheme, including hilly, tribal and
Maoist-affected areas where there was no existing fixed wireless or mobile coverage.
Nearly 50 - 60 percentage of the Indian population in rural areas are not provided with the basic
banking facilities, or in other words unbanked.
In this era of technology, Mobile banking is considered as one of the prime delivery channel which
attracts (can attract) crores of customers towards it. In such a case, all these 37000 villages will still
be adversely hit.
functions. Generally the functions of commercial banks are divided into two
categories viz. primary functions and the secondary functions. The following chart
simplifies the functions of banks.
2.
3.
To provide various cards such as credit cards, debit cards, Smart cards,
etc.
Main features:
of money form the public, repayable on demand or otherwise and withdraw able by
cheque, draft or otherwise. There are two essential functions that a financial
institution must perform to become a bank. These are,
Accepting of the chequable deposit form the public.
Lending.
Objectives:
In this report describe the various functions of commercial banks;
P u b l i c a r e mo t i v a t e d t o d e p o s i t m o r e f u n d s w i t h t h e b a n k . Th e r e i s
a l s o safety of funds deposited with the bank.
Demand deposit
: Also known as current deposit is those deposits which can be withdrawn by the
depositor at any time by means of cheque. No interest is paid on such
d e p o s i t s . R a t h e r, t h e d e p o s i t o r h a s t o p a y s o m e t h i n g t o t h e b a n k f o r
t h e s e r v i c e s r e n d e r e d b y t h e b u s i n e s s me n a n d i n d u s t r i a l i s t s . I t i s
a l s o c a l l e d current account.
Saving deposits
: These are those deposits on the withdrawal of which bank places certain
restrictions. Cheque facility is provided to the depositors. Saving deposits accounts
are generally held by households who have idle or surplus money for short
period.
Fixed deposit:
These are those deposits which can be withdrawn only after the expiry of the
c e r t a i n f i x e d t i m e p e r i o d . Th e s e d e p o s i t s c a r r y h i g h r a t e o f
i n t e r e s t . T h e longer the period, higher will be the rate of interest.
Distinguish between demand deposit and fixed deposit.
Demand deposit:
Demand deposit can be withdrawn by the depositor at
a n y t i m e without notice.
They are chequable i.e., demand deposits are withdraw able through
cheques
Scheduled Banks in India constitute those banks which have been included in the
Second Schedule of Reserve Bank of India(RBI) Act, 1934. RBI in turn includes only
those banks in this schedule which satisfy the criteria laid down vide section 42 (6) (a)
of the Act.
As on 30th June, 1999, there were 300 scheduled banks in India having a total
network of 64,918 branches. The scheduled commercial banks in India comprise of
State bank of India and its associates (8), nationalised banks (19), foreign banks (45),
private sector banks (32), co-operative banks and regional rural banks.
"Scheduled banks in India" means the State Bank of India constituted under the State
Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank
of India (Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new bank
constituted under section 3 of the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or any other bank
being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934
(2 of 1934), but does not include a co-operative bank".
"Non-scheduled bank in India" means a banking company as defined in clause (c) of
section 5 of the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduled
bank".
The following are the Scheduled Banks in India (Public Sector):
Andhra Bank
Allahabad Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Canara Bank
Corporation Bank
Dena Bank
Indian Bank
Syndicate Bank
UCO Bank
Vijaya Bank