Importance of Banks

Banks

As an individual or as a business owner, banks are very important for everyone. Bank is actually a financial institution which plays its role as a payment agent for customers and borrows and lends money. All countries have a different banking system as in Germany and Japan, banks are the primary owners of industrial corporations while in other countries such as United States of America, the banks are prohibited from owning non-financial companies. The name of the first modern bank was Banco Di San Giorgio and it was founded in the year 1406 in Italy, In Genoa.      

The functions and activities that banks perform includes paying cheques drawn by the customers on the bank and collecting cheques deposited to customers' current accounts. The new methods of payments are also introduced by the banks for its customers include telegraphic transfer, EFTPOS and ATM. There are so many banks that are serving for so many years which offer products and services to its customers. The web is the best source to find out more about banks but one must gather information from authentic sources only. The commercial role of the bank is quite wide as issuance of banknotes, issuing of bank drafts and bank cheques, accepting money on term deposit, lending  money by the way of overdraft, installment loan or otherwise, and much more.

Classification of Banking into Categories

In all parts of the world there are different banks that have been providing services for so many years. As banks are classified into different categories according to their functions and activities, it becomes easier to understand banking in depth. The categories of banking include business banking, investment banking, central banks, retail banking, and private banking. Here is the explanation of all these categories of banking that are mentioned above. The main purpose of the business banking and corporate banking is to provide different services to medium size business and large industries too. One can make the most of retail banking as it helps small businesses and individuals in their business activities. Retail banking are divided into further types namely community banks, community development bank, commercial bank, saving bank, postal saving bank and ethical banks etc. From the investing point of view, investment banking helps in buying and selling different financial securities and commodities. Private banking also has its role to play as it provides services to high net worth individuals in managing their wealth and assets while on the other hand central banks are the banks owned by the government of that country.

Banking industry has improved a lot with the help of information technology as online banking or internet banking are results of the development of information technology. Almost all the banks offer the facility of online banking, so now you can mange your accounts any time you want and any where you want. Everything just few clicks away, whether you want to check the status of your bank account or want to transfer money to account of other individuals. All this saves a lot of time and results in smooth business too. There is so much more about banks and banking which one can learn from the web.