Essay on Bank: Let us know about Essay on Bank. Banks are financial institutions that deal in monetary transactions. Banks are an integral part of any society. There are many banks located in different parts of our country. Although earlier India had a limited number of banks with few branches in major cities and towns, in the last few decades many new banks have opened branches in every nook and corner of the country.
Long and Short Essay on Bank
Essay on Bank 1 (300 words)
The banking system has been in place for centuries. This system is prevalent in India as well as in other parts of the world. The services and functions being provided have increased with the passage of time.
history of banks
Banking service was introduced in some parts of Italy in the 14th century. It was introduced on the lines of the concept of lending and borrowing among the people since the ancient era. In ancient times, traders gave grain loans to the banias and farmers. This was called the barter system. With the passage of time the system of depositing money and lending money went on evolving.
The Fagers, the Medicis, the Birenbergs, the Rothschilds are among the banking dynasties known to play a central role in the history of banking. They have ruled the region for centuries. Some modern banking services, such as the issuance of banknotes and reserve banking, began in the 17th century. The Bank of England and The Royal Bank of Scotland are some of the oldest banks in the world.
History of Banks in India
The banking system in India dates back to the Vedic civilization. In that era loans were given to the needy, In that period the loan was known as debenture or debenture.
In earlier times, big traders and zamindars used to give money to small traders and farmers on interest. This culture is still prevalent in some villages of the country. Those who were unable to pay the amount, their land or other valuable assets were confiscated, as banks do these days.
Bank of Hindustan was the first bank established in India. It was opened in Calcutta in 1770. Bank of Bombay, Bank of Calcutta and Bank of Madras were established in the early 19th century.
There are many types of banks in every country to meet the needs of different customers. They help in the development of various services and the economy of the country.
Essay on Bank 2 (400 words)
A bank is an institution that collects money from the public and provides funds to individuals as well as firms. These are the primary functions of a bank but not the only one. They also provide many other services to their clients such as locker facility, transfer of funds, issuance of drafts and portfolio management etc.
importance of banks
Banks are important for the individuals as well as for the development of the country’s economy. This is the reason why these institutions have the following importance:
- Provides relief and protection from fear
Money kept at home is not safe. There is a fear of it being stolen. When you keep your money in a bank, it is the bank’s responsibility to protect it. You don’t have to worry about its security.
- encourages savings habits
Banks offer various schemes from time to time so as to encourage savings habits among the people. The money deposited in the bank is not only safe but also grows. You have the option to withdraw it at any time.
- enhances trade and commerce
Banks promote business in the country by providing loans and advances to traders. It eases the process of trade between different countries. They provide the option of transacting money in a simple manner to make the process easier. It is easy to send and receive funds anywhere in the advanced banking system.
- promotes agriculture
The agricultural sector is an important part of the economy. There are specialized banks which provide loans to farmers at low interest to promote agricultural activities. Thus banks provide assistance in promoting the agriculture sector.
- Helps in the development of industries
Banks accept money from individuals and businesses and give loans to industries. Thus they help in the development of various industries in this way. The loan can be repaid in easy installments.
- provides employment opportunities
Banks provide loans for the development and progress of the agricultural and industrial sectors. As these sectors expand, employment opportunities are created in the public domain.
Banks are an important part of any country. Modern banking services have helped to ease the process of trade, development of industries and other activities which help in the growth of the country’s economy. Banks and other financial institutions that promote the growth of businesses and protect the wealth and other valuable assets of individuals certainly play an integral role in the development of a country’s economy.
Essay on Bank 3 (500 words)
Banks play an important role in maintaining financial stability in the country. They offer a range of services to help you manage your finances better. These institutions are an important part of the society.
functions of banks
The functions of banks are broadly classified into two categories. These are primary functions and secondary functions. Here is the detailed information on these:
Primary functions are the main functions of banks. These include accepting money and providing loans. Here is a brief rundown of these functions:
- accepting money
These accounts are basically of four different types:
Savings Accounts: These accounts encourage the public to save money. Money can be easily withdrawn from these and deposited in savings account without any restrictions. The interest rate in these accounts is quite low.
Current Accounts: This account is exclusively for businessmen. These accounts provide facilities like overdraft which are beneficial for businesses. No interest is paid in this account.
Term Account: A fixed amount of money is deposited in a fixed account for a fixed period. The interest rate on such deposits is high.
Recurring Account: A fixed amount is deposited in such account at regular intervals. The interest rate is high. However, the amount cannot be withdrawn before a certain period.
Here are the types of loans and lending given by banks:
Loan: Loan is given for both short term and long term. The rate of interest charged on the fee varies with the type of loan and the base. It can be repaid in installments.
Cash Credit: Customers have the facility to take cash of a fixed amount which is fixed in the money limit. For this a separate cash credit account should be maintained.
Overdraft: This facility is for merchants. This is how it is provided to the current account holders. They are not required to maintain separate accounts to avail this facility.
Secondary functions also known as non-banking functions are of two types. These are agency functions and general utility functions. Here’s a brief look at both of these types of functions:
- agency functions
The bank also acts as an agent for its customers. Many agency functions are carried out by this organization. It includes collection of cheques, periodic payments, portfolio management, periodic collection and transfer of funds. Banks also act as executors, administrators, advisors and trustees for their customers. They also help their clients deal with other institutions.
- general utility function
Banks also perform general utility functions which include locker facility, accounting of shares, dealing in foreign exchange, issuance of letters of credit and drafts, preparation of project reports, public welfare campaigns and undertaking social welfare programs such as adult literacy programmes. Huh.
Another service provided under this is the exemption of bill of exchange.
Although initially the functions of banks were only involved in depositing money and providing loans. They have now provided many other services as well. All these features are aimed at helping customers with their finances.
Essay on Bank 4 (600 words)
Banks are financial institutions that lend money to the general public and accept their money for deposit. Banks maintain the flow of money in the country and partners are also important for the economic development of the country. There are different types of banks that provide a variety of services to individuals as well as businesses.
types of banks
Here are the different types of banks and their functions:
- National/National Bank
Apart from this name, these banks are also known as central or federal banks. These banks manage the financial system of the government. These non-profit institutions serve as bankers to other banks. Every country has a central bank. Some of the functions of national banks include monitoring foreign exchange, controlling the country’s currency, and issuing paper currency. They do not deal with the general public.
- retail bank
This is the most common type of banks. These are generally set up to focus on the needs of the general public. These banks open savings accounts, provide credit cards, provide loans and provide locker facility among other services.
- Savings Bank
These are specially established to inculcate the habit of saving money among the people. Deposited money from customers in these banks is converted into securities and bonds. These were established in European countries back in the 18th century. Apart from this, these banks also provide many other services by accepting deposits of the people.
- commercial bank
The main objective of these banks is to help the business class. They provide loans to traders and also provide them other services which are useful for business men. Some of these services include bill of exchange, overdraft and check collection.
- investment bank
These banks have also been set up to help businesses. With the help of these banks, traders have established a strong foothold in the financial markets. Investment banks provide facilities to businessmen who need to sell loans to investors or want to receive money from the public for their business.
- Land Mortgage /Land Mortgage Bank
These are also known as agricultural banks or land development banks. Mainly it has been set up to help the agriculture sector by financing it. These banks also play an important role in land development. The reason why banks fall into this special category is that there is a lot of risk involved in financing the agriculture sector and commercial banks supporting other businesses are not ready to take such risks.
- Co-Operative / Co-Operative Bank
Co-operative/co-operative banks provide loans to small farmers, small businesses and salaried people. They provide commercial and retail services to the people. These banks are registered under the Co-operative Societies Act, 1912.
- consumer bank
These banks are specially set up to provide loans for purchasing durable consumer goods such as cars, washing machines, refrigerators, furniture etc., These banks pass on the advantage of easily repaying the loan in installments to their customers. These are mostly found in other countries.
- Industrial Bank
These are also known as development banks. These banks have been established to help the industrial sector, These banks accept cash money by issuing shares and debentures. These banks provide long-term loans to industries to help them expand and grow. After independence, many such banks have been established in the country.
- exchange/exchange bank
These banks exclusively deal with the financing of foreign trade. Some of the main functions of these banks include discounting of foreign bills, sale and purchase of silver and gold, and assistance in carrying out export and import business.
Banks are established to ease the financial issues of the general public as well as the entire country. Different types of banks serve different purposes and have been set up to meet the needs of different classes.