Anchoring Matter for Fresher Party

Meaning of border It is habitu everyy said that the rallying cry BANK has been originated in Italy. In the middle of 12th century on that point was a great fiscal crisis in Italy due to war. To meet the war expenses, the government of that period obligate a forced subscribed loan on citizens of the country at the entertain of 5% per annum. much(prenominal) loans were kn confess as Compara, Mintuo and so on The most common name was Monte. In Germany the word Monte was named as brink or slange. According to some writers, the word Bank has been derived from the word Banke. It is too said that the word Bank has been derived from the word Banco which content a banch.The Jews gold lenders in Italy used to transact their business academic term on banches at different market places. When any of them used to feel to meet his obligations, his banco or banch would be broken by the angry creditors. The word Bankrupt seems to be originated from broken banco. Since, the verifying system has been originated from notes bring business, it is rightly argued that the word Bank has been originated from the world banco. Today the word swan is used as a comprehensive term for a number institutions carrying on certain kinds of monetary business.In practice, the work Bank bureau which borrows money from one class of heap and again lends money to some former(a) class of people for occupy or profit. Definition of a Bank Oxford Dictionary defines a blaspheme as an establishment for bondage of money, which it pays out on customers order. Definition of verifying In general terms, the business activity of accepting and safeguarding money have by other singulars and entities, and then lending out this money in order to earn a profit. Read more http//www. investorwords. com/5413/banking. htmlixzz27ewFzo5g Characteristics / Features of a Bank v 1. Dealing in MoneyBank is a financial institution which deals with other peoples money i. e. money given by depositors. 2. Individual / Firm / Company A bank may be a person, firm or a company. A banking company means a company which is in the business of banking. 3. Acceptance of Deposit A bank accepts money from the people in the form of deposits which be usually rejoinable on demand or after the exit of a fixed period. It gives safety to the deposits of its customers. It also acts as a custodian of funds of its customers. 4. Giving Advances A bank lends out money in the form of loans to those who require it for different purposes. . Payment and Withdrawal A bank nominates easy wages and withdrawal facility to its customers in the form of cheques and drafts, It also brings bank money in circulation. This money is in the form of cheques, drafts, etc. 6. Agency and Utility Services A bank provides confused banking facilities to its customers. They include general utility services and agency services. 7. Profit and Service Orientation A bank is a profit seeking institution having service orien ted approach. 8. Ever increasing Functions Banking is an evolutionary concept. There is continuous expansion and diversification as regards he turns, services and activities of a bank. 9. Connecting Link A bank acts as a connecting link between borrowers and lenders of money. Banks collect money from those who have surplus money and give the same to those who be in need of money. 10. Banking Business A banks main activity should be to do business of banking which should not be subsidiary to any other business. 11. Name Identity A bank should always add the word bank to its name to enable people to know that it is a bank and that it is dealing in money. pillow slip 1. Saving Banks Saving banks are established to create salvage habit among the people.These banks are helpful for salaried people and low income collections. The deposits collected from customers are invested in bonds, securities, etc. At present most of the mercenary banks carry the functions of saving(a)s banks. Postal department also bring abouts the functions of saving bank. Type 2. Commercial Banks Commercial banks are established with an objective to help businessmen. These banks collect money from general public and give short-term loans to businessmen by way of property credits, overdrafts, etc. Commercial banks provide non-homogeneous services like collecting cheques, bill of x castrate, remittance money from one place to another place. In India, commercial-grade banks are established under Companies Act, 1956. In 1969, 14 commercial banks were nationalised by political science of India. The policies regarding deposits, loans, rate of interest, etc. of these banks are controlled by the primaeval Bank. Type 3. Industrial Banks / maturement Banks Industrial / study banks collect cash by issuing shares & debentures and providing long-term loans to industries. The main objective of these banks is to provide long-term loans for expansion and modernisation of industries.In India su ch banks are established on a large scale after independence. They are Industrial Finance Corporation of India (IFCI), Industrial Credit and Investment Corporation of India (ICICI) and Industrial Development Bank of India (IDBI). Type 4. Land Mortgage / Land Development Banks Land Mortgage or Land Development banks are also known as Agricultural Banks because these are formed to finance agricultural sector. They also help in land development. In India, Government has come forward to assist these banks. The Government has guaranteed the debentures issued by such banks.There is a great risk involved in the financing of agriculture and generally commercial banks do not take much interest in financing agricultural sector. Type 5. endemic Banks Indigenous banks means Money loaners and Sahukars. They collect deposits from general public and grant loans to the needy persons out of their own funds as well as from deposits. These indigenous banks are popular in villages and small towns. Th ey perform combined functions of trading and banking activities. Certain well-known indian communities like Marwaries and Multani even today run specialise indigenous banks.Type 6. Central / federal / National Bank Every country of the world has a exchange bank. In India, Reserve Bank of India, in U. S. A, federal Reserve and in U. K, Bank of England. These commutation banks are the bankers of the other banks. They provide specialised functions i. e. issue of paper currency, working as bankers of government, supervising and controlling contrary exchange. A central bank is a non-profit making institution. It does not deal with the public but it deals with other banks. The principal responsibility of Central Bank is thorough control on currency of a country. Type 7.Co-operative Banks In India, Co-operative banks are registered under the Co-operative Societies Act, 1912. They generally give credit facilities to small farmers, salaried employees, small-scale industries, etc. Co-ope rative Banks are available in rural as well as in urban areas. The functions of these banks are just similar to commercial banks. Type 8. Exchange Banks Hong Kong Bank, Bank of Tokyo, Bank of America are the examples of orthogonal Banks working in India. These banks are mainly concerned with financing foreign trade. Following are the various functions of Exchange Banks - . Remitting money from one country to another country, 2. Discounting of foreign bills, 3. Buying and Selling Gold and Silver, and 4. dowery Import and Export Trade. Type 9. Consumers Banks Consumers bank is a new addition to the existing type of banks. such banks are usually found only in advanced countries like U. S. A. and Germany. The main objective of this bank is to give loans to consumers for purchase of the durables like Motor car, television set, washing machine, furniture, etc. The consumers have to repay the loans in easy installments. Definition of Central BankThe entity responsible for overseeing the monetary system for a nation (or group of nations). Central banks have a wide range of responsibilities, from overseeing monetary policy to implementing specific goals such as currency stability, low inflation and full employment. Central banks also generally issue currency, function as the bank of the government, regulate the credit system, oversee commercial banks, manage exchange binds and act as a lender of become resort. Investopedia explains Central Bank The central banking system in the U. S. is known as the Federal Reserve System commonly known as the Fed), which is composed of 12 regional Federal Reserve Banks located in major cities throughout the country. The main tasks of the Federal Reserve are to handle and regulate banks, implement monetary policy by buying and selling U. S. Treasury bonds and steer interest rates. Ben Bernanke currently serves as the chairman of the Board of Governors of the Federal Reserve. FUNCTIONS OF CENTRAL BANK M. H. Do-Kock has explained t he following seven functions of a central bank in his book Central Banking which economists have generally accepted. 1. Monopoly of note-issue. 2.Banker, agent and adviser to the government. 3. steward of cash reserves of commercial banks. 4. Custodian of nations reserves of international currencies. 5. Lender of the last resort 6. Clearing hearth function 7. Credit control Besides the aforesaid seven functions in that location are some other functions also, namely (i) Collection of data. (ii) Role of central bank in maturation countries. (iii) Central bank and industrial and agricultural development. (iv) International financial institutions. 1. Monopoly of Note-Issue Note-issue primarily is the main function of a central bank in every country.These days, in all the countries where there is a central bank generally it has got the monopoly or the sole right of note-issue. In the beginning this was not the function of Central Bank but gradually all the central banks have acquired this function. First of all, Central Bank of England got the right of note-issue in the year 1844. In actual practice, upto the beginning of twentieth century, generally central banks were recognized as the banks of note-issue. In India, R. B. I. , the central bank of India has got the right of note-issue. 2. Banker, Agent & Adviser to the GovernmentAs banker to the government, central bank provides all those services and facilities to the government which public gets from the ordinary banks. It operates the accounts of the public enterprises. It manages government departmental undertakings and government funds and when there is a need gives loans to the government. It looks after the management of public debt. It accepts the payment of taxes from the public on behalf of the government and makes payment for the cheques issued by the government. It also undertakes transactions relating to foreign currencies on behalf of the government. 3.Custodian of Cash Reserves of Commercial Bank Central bank is the bank of banks. This signifies that it has the same relationship with the commercial banks in the country which they have with their customers. It provides security to their cash reserves, gives them loan at the times of need, gives them advice on financial and economic matters and works as clearing house among various member banks. A definite percentage of deposits of commercial banks are kept as reserve with the central bank. This leads to centralisation of cash reserve and facilitates working of credit control. These funds re of great deduction during the time of emergency. 4. Custodian of Nations Reserves of International Currencies Central bank is the custodian of the foreign currency obtained from various countries. This has become an important function of central bank, these days, because with its help it can stabilize the external value of the currency. This function has become highly important after the World Depression of 1929 and the establishment of the International Monetary Fund. 5. Lender of the Last Resort Central bank works as lender of the last resort for commercial banks because in the times of need t provides them financial assistance and accommodation. Whenever a commercial bank faces financial crisis, central bank as lender of the last resort comes to its rescue by advancing loans and the bank is saved from being failed. Central bank helps commercial banks by discounting their bills and securities. 6. Clearing House Function tout ensemble the commercial banks have their accounts with the central bank. Therefore, central bank settles the mutual transactions of banks and thus saves all banks contacting from each one other individually for setting their individual transactions, in this way the unnecessary cash ransactions between individual banks are avoided. 7. Credit Control This is a very important function. These days, the most important function of central bank is to control the volume of credit for bringing about stability in the general toll level and accomplishing various other socio-economic objectives. There are number of methods which a central bank may use for controlling the volume of credit such as bank rate, open market operations, change in reserve ratio and various selective controls. These methods have been discussed in detail in the adjacent question.