BANKING

A bank is a financial institution licensed by a government. Its primary activities include borrowing and lending money. Bank activity can be divided into so many types. Some of them are Commercial bank, Community bank, Private bank, Postal saving bank, saving bank etc.

Banks are very important players in financial markets. It is based on a relationship between the bank and the customer. The first state deposit bank was founded in 1407 at Genoa. In traditional banking system banks act as payment agents and they borrow money by accepting funds deposited on current accounts. But now days people can go for online banking also. Online banking contains so many features and capabilities but some rules are same as traditional banking. So many security measures are there in banking system to save the peoples money. Every bank has its own laws. Some of them are as follows.
 The bank account balance is the financial position between the bank and the customer: when the account is in credit, the bank owes the balance to the customer; when the account is overdrawn, the customer owes the balance to the bank.
 The bank agrees to pay the customer's cheques up to the amount standing to the credit of the customer's account, plus any agreed overdraft limit.
 The bank may not pay from the customer's account without a mandate from the customer, e.g. a cheque drawn by the customer.
 The bank agrees to promptly collect the cheques deposited to the customer's account as the customer's agent, and to credit the proceeds to the customer's account.
 The bank has a right to combine the customer's accounts, since each account is just an aspect of the same credit relationship.
 The bank has a lien on cheques deposited to the customer's account, to the extent that the customer is indebted to the bank.
 The bank must not disclose details of transactions through the customer's account, unless the customer consents, there is a public duty to disclose, the bank's interests require it, or the law demands it.
 The bank must not close a customer's account without reasonable notice, since cheques are outstanding in the ordinary course of business for several days.
Banks offer many different channels to access money and other services. They are Branch, ATM, Mail, Telephone banking, Online banking, Mobile banking, Video banking etc. Banks provides so many kinds of loans for education, to build house, for farmers etc. A bank generates a profit from the differential between the level of interest it pays for deposits and other sources of funds, and the level of interest it charges in its lending activities. So people can get more profit if there investment is more. Banking system is a safety one and people gets profits for there investments. So it’s essential to have a banking system in every country.