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'Meaning of aver It is oecumenically said that the joint â€Å" wedge” has been originated in Italy. In the middle of twelfth century in that respect was a outstanding fiscal crisis in Italy due to war. To partake the war expenses, the disposal of that period compel a forced subscribed bestow on citizens of the body politic at the participation of 5% per annum. such(prenominal) loans were cognize as Compara, Mintuo and so forth The most common cook was Monte. In Germany the word Monte was divulged as quite a littlet or avowe. According to somewhat writers, the word pious platitude has been derived from the word Banke. It is overly said that the word Bank has been derived from the word Banco which heart a banch.The Jews bullion lenders in Italy use to transact their business school landmark on banches at different grocery store places. When any of them used to feel to tally his obligations, his banco or banch would be broken by the angry honorable me ntionors. The word Bankrupt seems to be originated from broken banco. Since, the commiting system has been originated from nones change business, it is rightly argued that the word Bank has been originated from the universe banco. Today the word beach is used as a comprehensive term for a way out institutions carrying on authoritative kinds of financial business.In practice, the work Bank means which borrows money from one secern of great deal and again lends money to an different class of plenty for enliven or profit. explanation of a Bank Oxford Dictionary defines a aver as â€Å"an establishment for appreciation of money, which it pays out on customers order. ” Definition of riming In general terms, the business activity of pass judgment and safeguarding money owned by early(a) individuals and entities, and then lending out this money in order to earn a profit. Read more: http://www. investorwords. com/5413/ shoreing. html#ixzz27ewFzo5g Characteristics / Features of a Bank v 1. Dealing in MoneyBank is a financial institution which deals with other peoples money i. e. money given by depositors. 2. Individual / Firm / Company A swan may be a person, firm or a find with. A banking company means a company which is in the business of banking. 3. Acceptance of lay A bank accepts money from the people in the nervous strain of deposits which argon normally riposteable on demand or subsequently the expiry of a persistent period. It gives safety to the deposits of its customers. It also acts as a custodian of funds of its customers. 4. Giving Advances A bank lends out money in the form of loans to those who require it for different purposes. . fee and Withdrawal A bank cans motiveless payment and withdrawal facility to its customers in the form of cheques and drafts, It also brings bank money in circulation. This money is in the form of cheques, drafts, and so forth 6. Agency and Utility go A bank rears sundry(a) banking faci lities to its customers. They admit general utility serve and chest services. 7. Profit and Service Orientation A bank is a profit seeking institution having service oriented approach. 8. invariably increasing Functions Banking is an evolutionary concept. There is perpetual expansion and diversification as regards he draws, services and activities of a bank. 9. Connecting Link A bank acts as a connecting tie-up between borrowers and lenders of money. Banks cod money from those who generate surplus money and give the resembling to those who be in need of money. 10. Banking line of merchandise A banks chief(prenominal) activity should be to do business of banking which should not be subsidiary to any other business. 11. pee-pee Identity A bank should forever and a day add the word â€Å"bank” to its name to enable people to know that it is a bank and that it is dealing in money. suit 1. Saving Banks Saving banks ar naturalized to create saving habit among the p eople.These banks atomic number 18 helpful for compensable people and miserable income groups. The deposits collected from customers are invested in bonds, securities, etc. At present most of the mercenaryized banks carry the functions of savings banks. Postal surgical incision also perpetrates the functions of saving bank. compositors case 2. mercenary Banks Commercial banks are formal with an fair game to help businessmen. These banks collect money from general man and give short-term loans to businessmen by way of money credit entry entrys, overdrafts, etc. Commercial banks provide versatile services like collecting cheques, bill of xchange, remittance money from one place to other place. In India, technical banks are established under Companies Act, 1956. In 1969, 14 mercantile banks were nationalised by Government of India. The policies regarding deposits, loans, rate of interest, etc. of these banks are lockled by the interchange Bank. lineament 3. industr ial Banks / festering Banks industrial / using banks collect cash by egress shares & debentures and providing long-term loans to industries. The main objective of these banks is to provide long-term loans for expansion and modernisation of industries.In India such(prenominal) banks are established on a large scale after independence. They are Industrial Finance Corporation of India (IFCI), Industrial opinion and Investment Corporation of India (ICICI) and Industrial Development Bank of India (IDBI). guinea pig 4. domain of a function Mortgage / polish Development Banks Land Mortgage or Land Development banks are also known as Agricultural Banks because these are formed to finance agricultural sector. They also help in land development. In India, Government has come forward to assist these banks. The Government has guaranteed the debentures outd by such banks.There is a great fortune involved in the financial support of floriculture and mainly commercial banks do not take much interest in financing agricultural sector. Type 5. endemical Banks Indigenous banks means Money Lenders and Sahukars. They collect deposits from general public and grant loans to the impoverished persons out of their own funds as puff up as from deposits. These indigenous banks are popular in villages and small towns. They perform combined functions of trading and banking activities. Certain long-familiar indian communities like Marwaries and Multani even like a shot run specialised indigenous banks.Type 6. rally / federal officialeral / National Bank either country of the world has a primaeval bank. In India, put up got Bank of India, in U. S. A, national Reserve and in U. K, Bank of England. These key banks are the bankers of the other banks. They provide specialised functions i. e. issue of paper currency, works as bankers of presidential term, supervising and learnling distant exchange. A primordial bank is a non-profit making institution. It does not d eal with the public but it deals with other banks. The principal righteousness of primal Bank is thorough control on currency of a country. Type 7.Co-operative Banks In India, Co-operative banks are registered under the Co-operative Societies Act, 1912. They in the main give credit facilities to small farmers, salaried employees, small-scale industries, etc. Co-operative Banks are easy in rural as well as in urban areas. The functions of these banks are just similar to commercial banks. Type 8. Exchange Banks Hong Kong Bank, Bank of Tokyo, Bank of the States are the examples of Foreign Banks working in India. These banks are mainly concerned with financing orthogonal trade. Following are the various functions of Exchange Banks :- . Remitting money from one country to another country, 2. Discounting of foreign bills, 3. Buying and exchange Gold and Silver, and 4. Helping Import and trade Trade. Type 9. Consumers Banks Consumers bank is a in the raw addition to the existing ty pe of banks. Such banks are usually found solo in advanced countries like U. S. A. and Germany. The main objective of this bank is to give loans to consumers for corrupt of the durables like Motor car, tv set set, washing machine, furniture, etc. The consumers rush to repay the loans in easy installments. Definition of ‘ key BankThe entity responsible for overseeing the monetary system for a nation (or group of nations). Central banks apply a wide range of responsibilities, from overseeing monetary policy to useing specific goals such as currency stability, low inflation and abounding employment. Central banks also generally issue currency, function as the bank of the government, dictate the credit system, oversee commercial banks, make do exchange holds and act as a lender of last fix. Investopedia explains ‘Central Bank The central banking system in the U. S. is known as the Federal Reserve governance commonly known as â€Å"the Fed”), which is comp osed of 12 regional Federal Reserve Banks located in major(ip) cities throughout the country. The main tasks of the Federal Reserve are to supervise and regulate banks, implement monetary policy by get and selling U. S. Treasury bonds and steer interest rates. Ben Bernanke currently serves as the chairman of the display board of Governors of the Federal Reserve. FUNCTIONS OF CENTRAL BANK M. H. Do-Kock has explained the conterminous seven functions of a central bank in his book â€Å"Central Banking” which economists give birth generally accepted. 1. Monopoly of note-issue. 2.Banker, agent and adviser to the government. 3. custodian of cash reserves of commercial banks. 4. steward of nation’s reserves of international currencies. 5. Lender of the last resort 6. change family function 7. Credit control Besides the aforesaid seven functions in that respect are some other functions also, to wit: (i) Collection of data. (ii) Role of central bank in developing co untries. (iii) Central bank and industrial and agricultural development. (iv) supranational financial institutions. 1. Monopoly of Note-Issue: Note-issue primarily is the main function of a central bank in every country.These days, in all the countries where there is a central bank generally it has got the monopoly or the sole right of note-issue. In the commencement this was not the function of Central Bank but gradually all the central banks throw away acquired this function. First of all, Central Bank of England got the right of note-issue in the year 1844. In actual practice, upto the beginning of twentieth century, generally central banks were recognized as the banks of note-issue. In India, R. B. I. , the central bank of India has got the right of note-issue. 2. Banker, federal agent & Adviser to the Government:As banker to the government, central bank provides all those services and facilities to the government which public gets from the ordinary banks. It operates t he accounts of the public enterprises. It manages government departmental undertakings and government funds and when there is a need gives loans to the government. It looks after the focusing of public debt. It accepts the payment of taxes from the public on behalf of the government and makes payment for the cheques issued by the government. It also undertakes transactions relating to foreign currencies on behalf of the government. 3.Custodian of exchange Reserves of Commercial Bank: Central bank is the bank of banks. This signifies that it has the same kind with the commercial banks in the country which they have with their customers. It provides security to their cash reserves, gives them loan at the times of need, gives them advice on financial and frugal matters and works as clearing house among various member banks. A certain(prenominal) percentage of deposits of commercial banks are kept as reserve with the central bank. This leads to centralisation of cash reserve and f acilitates working of credit control. These funds re of great meaning during the time of emergency. 4. Custodian of Nations Reserves of foreign Currencies: Central bank is the custodian of the foreign currency obtained from various countries. This has become an alpha function of central bank, these days, because with its help it can stabilize the external value of the currency. This function has become highly grievous after the World Depression of 1929 and the establishment of the International Monetary Fund. 5. Lender of the Last dawdle: Central bank works as lender of the last resort for commercial banks because in the times of need t provides them financial assistance and accommodation. Whenever a commercial bank faces financial crisis, central bank as lender of the last resort comes to its rescue by advancing loans and the bank is saved from being failed. Central bank helps commercial banks by discounting their bills and securities. 6. Clearing theater of operations Functio n: All the commercial banks have their accounts with the central bank. Therefore, central bank settles the plebeian transactions of banks and thus saves all banks contacting each other individually for setting their individual transactions, in this way; the unnecessary cash ransactions between individual banks are avoided. 7. Credit Control: This is a very important function. These days, the most important function of central bank is to control the volume of credit for bringing about stability in the general price level and accomplishing various other socio-economic objectives. There are number of methods which a central bank may use for controlling the volume of credit such as bank rate, outdoors market operations, change in reserve ratio and various selective controls. These methods have been discussed in detail in the next question.\r\n'