Anchoring Matter for Fresher Party

Meaning of desire It is for the most part said that the term BANK has been originated in Italy. In the middle of 12th century at that place was a abundant financial crisis in Italy due to war. To bet the war expenses, the government of that fulfilment imposed a forced subscribed loan on citizens of the artless at the s pursues of 5% per annum. such(prenominal) loans were issuen as Compara, Mintuo and so forth The most common name was Monte. In Germany the word of honor Monte was named as rely or Banke. According to some writers, the word Bank has been derived from the word Banke. It is as well said that the word Bank has been derived from the word Banco which means a banch.The Jews property lenders in Italy used to transact their business sitting 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 stop seems to be originated from broken banco. Since, the b nig ht clubing system has been originated from money lending business, it is reclaimly argued that the word Bank has been originated from the world banco. Today the word avow is used as a comprehensive term for a number institutions carrying on p finisered kinds of financial business.In practice, the work Bank means which borrows money from one syndicate of pile and again lends money to an opposite class of people for interest or net income. Definition of a Bank Oxford Dictionary defines a stick as an establishment for custody of money, which it pays out on customers order. Definition of tilling In general terms, the business activity of accepting and safeguarding money owned by opposite man-to-mans and entities, and then lending out this money in order to earn a profit. Read more http//www. investorwords. com/5413/ cussing. htmlixzz27ewFzo5g Characteristics / Features of a Bank v 1. Dealing in MoneyBank is a financial institution which deals with other peoples money i. e. mo ney expiren by depositors. 2. Individual / Firm / family A avow 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 atomic number 18 usu entirelyy repayable on withdraw or after the expiry of a fixed period. It gives safety to the deposits of its customers. It also acts as a keeper 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. . remune symmetryn and Withdrawal A bank provides easy payment and withdrawal set 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, and so on 6. Agency and Utility Services A bank provides conglomerate banking facilities to its customers. They include general utility serve and fashion services. 7. Profit and Service Orientati on A bank is a profit seeking institution having service oriented approach. 8. Ever increasing Functions Banking is an evolutionary concept. There is continuous b belittledup and diversification as regards he track downs, services and activities of a bank. 9. Connecting Link A bank acts as a connecting interrelate between borrowers and lenders of money. Banks collect money from those who have surplus money and give the same to those who argon in need of money. 10. Banking Business A banks main(prenominal) activity should be to do business of banking which should not be adjunct to any other business. 11. Name Identity A bank should ceaselessly add the word bank to its name to enable people to know that it is a bank and that it is dealing in money. image 1. preservation Banks Saving banks atomic number 18 established to create saving habit among the people.These banks atomic number 18 encouraging for salaried people and low income groups. The deposits collected from custome rs are invested in bonds, securities, etc. At present most of the mercantileised banks carry the functions of savings banks. postal department also performs the functions of saving bank. oddball 2. commercialised Banks Commercial banks are established with an objective to help businessmen. These banks collect money from general humanity and give short-term loans to businessmen by way of hard currency credits, overdrafts, etc. Commercial banks provide various services same collecting cheques, card of xchange, remittance money from one place to another place. In India, commercial banks are established under Companies Act, 1956. In 1969, 14 commercial banks were nationalised by organisation of India. The policies regarding deposits, loans, rate of interest, etc. of these banks are controlled by the underlying Bank. quality 3. industrial Banks / Development Banks Industrial / Development banks collect cash by issuing shares & debentures and providing long-term loans to indus tries. The main objective of these banks is to provide long-term loans for expansion and modernisation of industries.In India such banks are established on a overlarge 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 hoidenish Banks because these are formed to finance rude 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 primarily commercial banks do not take much interest in financing agricultural sector. Type 5. natural Banks Indigenous banks means Money Lenders and Sahukars. They collect deposits from general public and consecrate 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. They perform unite functions of trading and banking activities. Certain well-known indian communities analogous Marwaries and Multani even nowadays run specialised indigenous banks.Type 6. Central / federal official / National Bank Every country of the world has a primaeval bank. In India, bear Bank of India, in U. S. A, national Reserve and in U. K, Bank of England. These of import banks are the bankers of the other banks. They provide specialised functions i. e. issue of paper currency, running(a) as bankers of government, supervising and controlling opposed exchange. A exchange 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-operative Banks are available in rural as well as in urban areas. The functions of these banks are just similar to commercial banks. Type 8. telephone exchange Banks Hong Kong Bank, Bank of Tokyo, Bank of America are the examples of Foreign 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. Helping 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, washi ng 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 concatenation 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, limit the credit system, oversee commercial banks, grapple exchange reserves and act as a lender of last fixture. Investopedia explains Central Bank The commutation banking system in the U. S. is known as the Federal Reserve System commonly known as the Fed), which is peaceful of 12 regional Federal Reserve Banks located in study cities throughout the country. The main tasks of the Federal Reserve are to supervise 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 the 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 advisor to the government. 3. Custodian of cash reserves of commercial banks. 4. Custodian of nations reserves of international currencies. 5. Lender of the last resort 6. Clearing preindication function 7. Credit control Besides the aforesaid seven functions there are some other functions also, namely (i) Collection of data. (ii) Role of central bank in developing 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 gener ally it has got the monopoly or the sole slump of note-issue. In the beginning this was not the function of Central Bank but in stages 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 watchfulness of public debt. It accepts the payment of taxes from the public on behalf of the government and makes payment for th e cheques issued by the government. It also undertakes proceedings 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 measure of need, gives them advice on financial and economic matters and full treatment as change 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 signification 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 go an valuable function of central bank, t hese 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 totally 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 each 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 delivery about stability in the general price 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 bordering question.