Basic concepts of Banking
Banking means accepting for the purpose of lending or investment of deposits of money from the public Banking deals with withdraw, deposit, cheque and loan. Bank is an institution which deals money and credit.
Central government is empowered of banking companies. In banking section most important one is customer. Customer means a person who has an account with a banker. One person cannot be called as a customer immediately on opening an account but he will be called as after having regular dealing with a banker.
A customer need not always be an individual. In other words it may be firm, companies, co-operatives etc. Bank may classified as three type of account
- fixed deposit account
- saving bank account
- current account
Fixed deposit account
Amount is deposit in fixed periods. In fixed deposit, customer gets more benefit than savings account. High rate of interest is offered on such deposit.
Saving bank account
It is meant for small savers. Its main objective is to encourage the habit of saving in public. In order to attract the people to saving the money, some commercial banks have introduced a number of new saving schemes.
Daily saving scheme, children saving scheme, minor’s saving scheme.
A current account is a running account and it can be operated for any number of times without any restriction. It is only safeguard the customer. Therefore, it is suitable for business concerns, companies, institutions and public undertakings.
No interests given to current account.
Bank pass book
It is an authorized copy of the customer’s account with the bank. It is written by the bank and handed over to the customer for his reference. The customer can get it, updated by banker, each and every transaction. It is knows as pass book.
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