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A company which transacts business with finance is called a bank.

The word ‘Bank’ has been derived from the French word Banque.

The functions of the bank are:

1. Accepting deposits from the public and others. 

2. Lending money to public and other institutions in the form of loans. 

3. Transferring money from one place to another (Remittence), 

4. Collecting money by cheques, drafts and bills. 

5. Discounting of bills. 

6. Providing facility of safe deposit lockers for account holders. 

7. Performing foreign exchange transactions. 

8. Performing government transactions. 

9. Issuing letters of credit and guarantee.

The list of the characteristics relating to bank transactions is as under: 

1. Dealing with money, 

2. Acceptance of deposits 

3. Lending loans 

4. Payment and withdrawal 

5. Agency and Utility services, 

6. Profit and Service orientation 

7. Connecting link 

8. Name identity.

Term deposit.

The advantages of opening a bank account are: 

1. Bank account facilitates safe custody of money. 

2. Bank account helps in making payments 

3. Bank account helps in collection of money 

4. Bank account holders get advances and loans. 

5. Bank account helps in smooth financial transactions. 

6. Bank account holders get safe deposit locker facilities.

The number of saving bank account holder is increasing because: 

1. Banks are the safe custody for depositing money. 

2. Depositing money in the banks is helpful to meet future requirements like children’s education and wedding expenses. 

3. Banks give interest to the deposits. 

4. Banks provide advances in loans for agriculture and business purposes etc.

current account.

The relation between a bankers and customers is classified in two categories, namely

1. General relationship: 

• Primary relationship: It is a debtor and creditor relationship, 
• Subsidiary relationship- It it trustee and beneficiary relationship. 
• Agent and Principal relationship.

2. Special relationship: 

• Obligation to honour the cheques, 
• Obligation to maintain secrecy of accounts.

Banker’s bank is Reserve Bank of India.

This type of account is generally opened in Banks by salaried persons or by the persons who have a fixed regular income.

State Bank of India

There are 20 Nationalised and 19 Foreign banks are there in India.