Banks

Introduction of Banking

The word ‘bank’ is derived from the Italian word ‘banco’ which means accumulation of money of stock. Bank refers to those institutions which are established under law for dealing with monitory transactions. It means those institutions are treated as banks which accepts deposits of public and grant loans to the needy person or businessmen and nowadays bank provides debit cards, credit card, telebanking service  and ATM services.

Bank is an institution originated from Italy ‘Bank of Venice’ which was the first bank in the world which was established in 1157 A.D. at Italy. The second bank was ‘Bank of Barceló’ of Spain which was established in 1401 A.D. The first central bank of England was established in 1877 A.D. Bank is a financial intermediary accepting deposits and granting loans. It offers the widest menu of services of any financial institutions. Many economists give different definitions of the bank.

According to Kent, ‘A bank is an organization whose principal operations are concerned with the accumulation of the temporarily idle money of the general public for the purpose of advancing to other for advancing.’

The Commercial Bank Act 2031 B.S., ‘A commercial bank is a bank, which deals in exchange currency accepting deposits giving loans and doing commercial transaction.’

Summarizing above definitions, we can say that bank is an institution, which accepts deposits from the public and in turn, advance loan to business and personal customers. It is the financial institutions which provide wide range of banking services such as saving, credit payment, remittance, etc. Hence a bank may be called the financial supermarket providing all kinds of monetary services, which is necessary for the industrialization and economic development of a country.