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Bank may have different definitions but almost all definitions are denoting the same or similar tone:
Bank is a financial institution, which deals with money and credit. Bank
accepts deposits from the public and mobilizes the fund to productive
sectors. Bank also provides remittance facility to transfer money from
one place to another. Generally, bank accepts deposits from business
institutions and individuals , which is mobilized into productive
sectors mainly business and consumer lending. So bank is also called a
dealer of money. At present context, a bank may engaged in different
types of functions such as remittance, exchange currency, joint venture,
underwriting, bank guarantee, discounting bills etc. The modern bank
refers to an institution having the following characteristics:
* Bank deals with money: it accepts deposits and advances loans.
* Bank also deals with credit: it has the ability to create credit by expanding its liabilities.
* Bank is commercial institution: it aims at earning profit.
Banks are the principal source of credit for millions of individuals and
families and for many units of government. They are among the most
important financial institutions in the economy. Moreover, for small
local businesses to large dealers, banks are often the major source of
credit to stock the shelves with merchandise. Banks grand more
installment loans to consumer than any other financial institutions.
Banks are among the leading buyers of bonds and notes issued by
government to finance public facilities, ranging from hospitals and
football stadiums to airports and highways. Moreover, bank reserves are
the principal channel for government economic policy to stabilize the
economy.
Banks are the important sources of short-term working capital for
businesses. They have become increasingly active in recent years in
making long-term business loans for new plants and equipment. When
businesses and consumers must make payments for purchase of goods and
services, more often they use bank provided cheques, debit or credit
cards, or electronic accounts connected to a computer network.
