B Com Exam > B Com Notes > Indian Financial System > Definition of Bank - Indian Banking System, Indian Financial System
Definition of Bank - Indian Banking System, Indian Financial System | Indian Financial System - B Com PDF Download
Finance is the life blood of trade, commerce and industry. Now-a-days, banking sector acts as the backbone of modern business. Development of any country mainly depends upon the banking system.
The term bank is either derived from old Italian word banca or from a French word banque both mean a Bench or money exchange table. In olden days, European money lenders or money changers used to display (show) coins of different countries in big heaps (quantity) on benches or tables for the purpose of lending or exchanging.
A bank is a financial institution which deals with deposits and advances and other related services. It receives money from those who want to save in the form of deposits and it lends money to those who need it.
Definition of a Bank
Oxford Dictionary defines a bank as "an establishment for custody of money, which it pays out on customer's order."
Characteristics / Features of a Bank
1. Dealing in Money
Bank is a financial institution which deals with other people's money i.e. money given by depositors.
2. Individual / Firm / Company
A bank may be a person, firm or a company. A banking company means a company which is in the business of banking.
3. Acceptance of Deposit
A bank accepts money from the people in the form of deposits which are usually repayable on demand or after the expiry of a fixed 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.
5. Payment and Withdrawal
A bank provides easy 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, etc.
6. Agency and Utility Services
A bank provides various banking facilities to its customers. They include general utility services and agency services.
7. Profit and Service Orientation
A bank is a profit seeking institution having service oriented approach.
8. Ever increasing Functions
Banking is an evolutionary concept. There is continuous expansion and diversification as regards the functions, services and activities of a bank.
9. Connecting Link
A bank acts as a connecting link between borrowers and lenders of money. Banks collect money from those who have surplus money and give the same to those who are in need of money.
10. Banking Business
A bank's main activity should be to do business of banking which should not be subsidiary to any other business.
11. Name Identity
A bank should always add the word "bank" to its name to enable people to know that it is a bank and that it is dealing in money
The document Definition of Bank - Indian Banking System, Indian Financial System | Indian Financial System - B Com is a part of the B Com Course Indian Financial System.
All you need of B Com at this link: B Com
|
39 videos|39 docs|14 tests
|
FAQs on Definition of Bank - Indian Banking System, Indian Financial System - Indian Financial System - B Com
| 1. What is the definition of a bank in the Indian banking system? |  |
Ans. In the Indian banking system, a bank is a financial institution that accepts deposits, provides loans, and offers various financial services to individuals, businesses, and the government. It acts as an intermediary between those who have surplus funds and those who need funds.
| 2. What is the Indian financial system? | |
Ans. The Indian financial system refers to the network of financial institutions, markets, instruments, and services that facilitate the flow of funds within the country's economy. It includes banks, non-banking financial companies (NBFCs), stock exchanges, insurance companies, mutual funds, and other entities that contribute to the functioning of the financial sector.
| 3. What are the key functions of banks in the Indian banking system? | |
Ans. Banks in the Indian banking system perform several important functions, including:
a) Accepting deposits: Banks collect deposits from individuals, businesses, and the government, which can be withdrawn as and when required.
b) Providing loans: Banks lend funds to individuals, businesses, and the government for various purposes such as buying homes, starting businesses, or financing infrastructure projects.
c) Issuing credit cards: Banks issue credit cards that allow individuals to make purchases on credit and repay it later.
d) Facilitating payments: Banks provide various payment services such as issuing checks, online banking, and electronic fund transfers, making it easier for individuals and businesses to make transactions.
e) Offering investment and insurance products: Banks offer investment options such as fixed deposits, mutual funds, and insurance products to help customers grow their wealth and protect against risks.
| 4. How does the Indian banking system contribute to the country's economic development? | |
Ans. The Indian banking system plays a crucial role in the country's economic development in the following ways:
a) Mobilizing savings: Banks collect savings from individuals and channelize them towards productive investments, which promotes capital formation and economic growth.
b) Providing credit: Banks provide loans to individuals and businesses, enabling them to invest in productive activities, expand their businesses, and create employment opportunities.
c) Facilitating trade and commerce: Banks offer various services like trade finance, letters of credit, and export-import financing, which facilitate domestic and international trade, boosting economic activity.
d) Promoting financial inclusion: Banks extend their services to remote and underserved areas, promoting financial inclusion and enabling individuals to participate in economic activities.
e) Strengthening monetary policy: Banks act as intermediaries in implementing the monetary policy of the central bank by influencing the money supply, interest rates, and credit availability in the economy.
| 5. What are the regulatory bodies governing the Indian banking system and financial system? | |
Ans. The Indian banking system and financial system are regulated and supervised by the following regulatory bodies:
a) Reserve Bank of India (RBI): The RBI is the central bank of India and regulates the functioning of banks, NBFCs, and other financial institutions. It formulates monetary policy, issues licenses, and supervises the overall functioning of the financial system.
b) Securities and Exchange Board of India (SEBI): SEBI is the regulatory body for the securities market in India. It regulates stock exchanges, intermediaries, and securities-related activities to protect investors' interests and ensure the fair and transparent functioning of the capital market.
c) Insurance Regulatory and Development Authority of India (IRDAI): IRDAI is responsible for regulating and promoting the insurance sector in India. It supervises insurance companies, protects policyholders' interests, and ensures the stability and growth of the insurance industry.
d) Ministry of Finance: The Ministry of Finance formulates policies and regulations related to the banking and financial sector in India. It oversees the functioning of various regulatory bodies, such as RBI, SEBI, and IRDAI, and plays a crucial role in shaping the overall financial system of the country.
Related Exams
About this Document
|
1.6K Views |
|
4.93/5 Rating |
|
Dec 23, 2024 Last updated |
Document Description: Definition of Bank - Indian Banking System, Indian Financial System for B Com 2024 is part of Indian Financial System preparation.
The notes and questions for Definition of Bank - Indian Banking System, Indian Financial System have been prepared according to the B Com exam syllabus. Information about Definition of Bank - Indian Banking System, Indian Financial System covers topics
like and Definition of Bank - Indian Banking System, Indian Financial System Example, for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises and tests below for Definition of Bank - Indian Banking System, Indian Financial System.
Introduction of Definition of Bank - Indian Banking System, Indian Financial System in English is available as part of our Indian Financial System
for B Com & Definition of Bank - Indian Banking System, Indian Financial System in Hindi for Indian Financial System course.
Download more important topics related with notes, lectures and mock test series for B Com
Exam by signing up for free. B Com: Definition of Bank - Indian Banking System, Indian Financial System | Indian Financial System - B Com
Description
Full syllabus notes, lecture & questions for Definition of Bank - Indian Banking System, Indian Financial System | Indian Financial System - B Com - B Com | Plus excerises question with solution to help you revise complete syllabus for Indian Financial System | Best notes, free PDF download
Information about Definition of Bank - Indian Banking System, Indian Financial System
In this doc you can find the meaning of Definition of Bank - Indian Banking System, Indian Financial System defined & explained in the simplest way possible. Besides explaining types of
Definition of Bank - Indian Banking System, Indian Financial System theory, EduRev gives you an ample number of questions to practice Definition of Bank - Indian Banking System, Indian Financial System tests, examples and also practice B Com
tests
|
Explore Courses for B Com exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
Related Searches
Definition of Bank - Indian Banking System
,Viva Questions
,practice quizzes
,Indian Financial System | Indian Financial System - B Com
,past year papers
,mock tests for examination
,Definition of Bank - Indian Banking System
,Summary
,shortcuts and tricks
,Previous Year Questions with Solutions
,Objective type Questions
,video lectures
,Extra Questions
,Important questions
,Indian Financial System | Indian Financial System - B Com
,Sample Paper
,ppt
,study material
,Definition of Bank - Indian Banking System
,Free
,MCQs
,Exam
,Indian Financial System | Indian Financial System - B Com
,Semester Notes
;
Additional Information about Definition of Bank - Indian Banking System, Indian Financial System for B Com Preparation
Definition of Bank - Indian Banking System, Indian Financial System Free PDF Download
The Definition of Bank - Indian Banking System, Indian Financial System is an invaluable resource that delves deep into the core of the B Com exam.
These study notes are curated by experts and cover all the essential topics and concepts, making your preparation more efficient and effective.
With the help of these notes, you can grasp complex subjects quickly, revise important points easily,
and reinforce your understanding of key concepts. The study notes are presented in a concise and easy-to-understand manner,
allowing you to optimize your learning process. Whether you're looking for best-recommended books, sample papers, study material,
or toppers' notes, this PDF has got you covered. Download the Definition of Bank - Indian Banking System, Indian Financial System now and kickstart your journey towards success in the B Com exam.
Importance of Definition of Bank - Indian Banking System, Indian Financial System
The importance of Definition of Bank - Indian Banking System, Indian Financial System cannot be overstated, especially for B Com aspirants.
This document holds the key to success in the B Com exam.
It offers a detailed understanding of the concept, providing invaluable insights into the topic.
By knowing the concepts well in advance, students can plan their preparation effectively.
Utilize this indispensable guide for a well-rounded preparation and achieve your desired results.
Definition of Bank - Indian Banking System, Indian Financial System Notes
Definition of Bank - Indian Banking System, Indian Financial System Notes offer in-depth insights into the specific topic to help you master it with ease.
This comprehensive document covers all aspects related to Definition of Bank - Indian Banking System, Indian Financial System.
It includes detailed information about the exam syllabus, recommended books, and study materials for a well-rounded preparation.
Practice papers and question papers enable you to assess your progress effectively.
Additionally, the paper analysis provides valuable tips for tackling the exam strategically.
Access to Toppers' notes gives you an edge in understanding complex concepts.
Whether you're a beginner or aiming for advanced proficiency, Definition of Bank - Indian Banking System, Indian Financial System Notes on EduRev are your ultimate resource for success.
Definition of Bank - Indian Banking System, Indian Financial System B Com Questions
The "Definition of Bank - Indian Banking System, Indian Financial System B Com Questions" guide is a valuable resource for all aspiring students preparing for the
B Com exam. It focuses on providing a wide range of practice questions to help students gauge
their understanding of the exam topics. These questions cover the entire syllabus, ensuring comprehensive preparation.
The guide includes previous years' question papers for students to familiarize themselves with the exam's format and difficulty level.
Additionally, it offers subject-specific question banks, allowing students to focus on weak areas and improve their performance.
Study Definition of Bank - Indian Banking System, Indian Financial System on the App
Students of B Com can study Definition of Bank - Indian Banking System, Indian Financial System alongwith tests & analysis from the EduRev app,
which will help them while preparing for their exam. Apart from the Definition of Bank - Indian Banking System, Indian Financial System,
students can also utilize the EduRev App for other study materials such as previous year question papers, syllabus, important questions, etc.
The EduRev App will make your learning easier as you can access it from anywhere you want.
The content of Definition of Bank - Indian Banking System, Indian Financial System is prepared as per the latest B Com syllabus.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup