Bank is an organization in which people deposits,withdraw,and takes credit(loan).In our country all banks works under the RBI.All the banks has to give the data status of money being deposited,withdrawn or taken as credit to RBI.about only 15% of deposited money is being available in bank as for the purpose of withdrawing. Banks belongs to formal sector.Banks gives the credit by taking any collateral as guarantee,as when the borrower return the total money taken as credit with interest from banks the borrower can take his/her collateral back himself.

Bank and Loan Activities

A bank is a financial institution that provides a range of services to individuals, businesses, and governments. One of the primary activities of a bank is to lend money to borrowers, which is known as loan activity. Let's delve into the meaning of bank activities and loan activities in detail.

Bank Activities

Banks offer various services that facilitate financial transactions and help people manage their money. Some key bank activities include:

1. Deposit and Withdrawal: Banks allow individuals and businesses to deposit money into their accounts and withdraw funds as needed. These deposits can be made through various means such as cash, checks, or electronic transfers.

2. Payment Services: Banks provide payment services to their customers, enabling them to transfer money to other individuals or entities. This can be done through methods like online banking, wire transfers, or issuing checks.

3. Safekeeping of Valuables: Banks offer safe deposit boxes where customers can securely store valuable items such as jewelry, important documents, or other valuable possessions.

4. Foreign Exchange: Banks facilitate foreign exchange transactions, allowing customers to convert one currency into another. This service is particularly important for individuals and businesses engaged in international trade.

5. Investment Services: Many banks offer investment services, such as brokerage accounts or mutual funds, allowing customers to invest their money in various financial instruments and grow their wealth.

Loan Activities

Loan activities form a significant part of a bank's operations. Banks lend money to individuals, businesses, and governments to meet their financial needs. Here are some key points regarding loan activities:

1. Types of Loans: Banks offer different types of loans, including personal loans, home mortgages, auto loans, business loans, and lines of credit. Each loan type has specific terms and conditions tailored to the borrower's needs and the purpose of the loan.

2. Interest Rates: When providing loans, banks charge interest to compensate for the risk and opportunity cost of lending money. Interest rates vary based on factors such as the borrower's creditworthiness, loan duration, and prevailing market conditions.

3. Loan Approval Process: Banks assess the creditworthiness of borrowers before approving loan applications. They evaluate factors such as credit history, income, employment stability, and existing debt obligations to determine the borrower's ability to repay the loan.

4. Loan Repayment: Borrowers are required to repay the loan amount along with interest within a specified period. Repayment terms can vary, ranging from a few months to several years, depending on the loan type and agreement between the bank and the borrower.

5. Risk Management: Banks employ risk management strategies to mitigate the potential risks associated with lending money. This includes analyzing credit risk, collateral evaluation, and monitoring loan performance to ensure timely repayments.

In summary, banks engage in various activities to provide financial services to their customers, including deposit and withdrawal services, payment services, safekeeping of valuables, foreign exchange, and investment services. Loan activities involve lending money to individuals, businesses, and governments, with different types of loans, interest rates, approval processes, and repayment terms. Banks play a crucial role in promoting economic growth by facilitating financial transactions and supporting individuals and businesses in achieving their financial