A bank is an organization, the major function of which is to deal in money and credit. The main business of bank is to pool the scattered idle deposits in the public and channel it for productive use. It collects deposits and invests or lends to those who stand in need of money. Bank in other words, is a custodian of money received from the depositors. Hence its responsibility towards the general public is pretty different than those who are involved in other types of trades and service. Modern day bank exibit the trait more of a department store with a wide range of financial products to offer.
Bank can be a person, company or a firm, with a place of business, and must be involved in credit creation. The business of a modern day bank is not confined in borrowing deposits and lending advances only, it performs host of other financial activities which has immensely contributed to achieve industrial and commercial progress of every country.
As per R.S Sayers, “bank is an institution whose whole debts are widely accepted in settlement of others people’s debts.”
No comments:
Post a Comment