BANK

Bank is an institution which deals in money and credit. It accepts deposits from the
public and grants loans and advances to those who are in need of funds for various
purposes.
Bank receives demand deposits and time deposits, honors instruments drawn on
them, and pays interest on them:

 Discounts notes,
 Makes Loams,
 And invests in securities;
 Collects cheques, drafts, and notes;
 Certifies depositor’s cheques; and issues drafts and cashier’s cheques.

BANKING
Banking is an activity which involves acceptance of deposits for the purpose of
lending or investing. In addition to accepting deposits and lending funds, banking also
involves in providing various other services along with its main banking activity.
These are mainly agency services, but include several general services as well.
BANKER:
A banker is one who undertakes banking activities, accepting deposits and lending
money for different purpose. The Banking Regulation Act, 1949 defines banking as an
activity of accepting funds from the public for the purpose of lending or investment

The essential features of banking activities are as follows:-

i) Accepting deposits from public;

ii) Lending or investment of such deposits;
iii) Incidental to the activities of accepting deposits for lending or investing, banks
undertake activities like :-

Origin and Growth of Banking

The word “BANK” originally was referred to an individual or organization which

acted as a money changer and exchanged one currency for another but these days, a
bank is an institution in which people keep their cash balances in the form of deposits
and further these institutions lend to the people who require funds.

“Banks are institutions whose debt-usually refers to as ‘Bank Deposits’ – are

commonly accepted in final settlement of other’s debts.” ------Prof. Say

According to the Banking Regulator Act 1949, “Banking means the accepting for
the purpose of lending or investment of deposit of money from the public, repayable
on demand or otherwise and withdrawal by cheques, draft, order or otherwise.” In
India, Banking originated in the first decade of 18th Century when the General Bank
came into existence in 1786 which was followed by the Bank of Hindustan. Both
these banks are now defunct. The oldest bank in existence in India is the State Bank of
India which was established as the Bank of Calcutta in June 1806. In early 1990s, the
Narasimha Rao government embarked on the policy of liberalization and gave license
to small number of respondents of private banks, which later came to be known as
new generation banks such as ICICI Bank and HDFC Bank. In India, banking is
considered fairly matured in terms of supply, product range and reach – although
reach in rural India still stands a challenge for the private sector and foreign banks.

Nature and Scope of Banking Activities

Banking activities are considered to be the life blood of the national economy.
Without banking services, trading and business activities cannot be carried on
smoothly. Banks are the distributors and protectors of liquid capital which is of vital
significance to a developing country. Efficient administration of the banking system
helps in the economic growth of the nation. Banking is useful to trade and commerce.

Definition of a Money Lender

A money lender is a person who lends money to others. However, there is a lot
more to the job than just giving money to individuals or companies. There are a lot of
tasks and responsibilities that a money lender holds. There are also many kinds of
money lenders. Each position offers money to different markets.

Functions

 A money lender is responsible for determining who may receive a loan.

Banking institutions hold the highest amount of lenders. The money lender
helps applicants file for loan approval and determines whether or not the
applicant should receive the loan. Money lenders can lend money to both
individuals and companies.
.
Significance

 The position of money lender is very significant. Their role is to be the liaison
between individuals who need loans and the institutions that provide them. The
role of a money lender is to balance the amount of money lent with the amount
of money the institution has available for loans. Money lenders also are the
main determining factor in whether an individual receives a loan. Because of
this important task, money lenders hold some of the most important positions
in business.

Role of Banking

1. Banks provide funds for business as well as personal needs of individuals.

They play a significant role in the economy of a nation. Let us know about the
role of banking.
2. It encourages savings habit among people and thereby makes funds available
for productive use.
3. It acts as an intermediary between people having surplus money and those
requiring money for various business activities.
4. It facilitates business transactions through receipts and payments by cheques
instead of currency.
5. It provides loans and advances to businessmen for short term and long term
purposes.
6. It also facilitates import export transactions.
7. It helps in national development by providing credit to farmers, small-scale
industries and self-employed people as well as to large business houses which
lead to balanced economic development in the country.
8. It helps in raising the standard of living of people in general by providing loans
for purchase of consumer durable goods, houses, automobiles, etc.