Banks are financial institutions that offer loans or save money for customers. The word ‘Bank’ is derived from the word ‘Banc’ or ‘Banque,’ meaning a bench on which the old-day financiers would display their coins in the marketplace or transact their business.
Banks are an important feature of society. In various parts of the world, banks are located and deal directly with the general public. They have many customer-based facilities and lockers, ATM Services.
Some use the word ‘financial bank‘ to refer to a bank or a subsidiary of a bank that primarily deals with deposits and loans from businesses or large firms, as the two no longer have to be under different ownership.
Types of banks:
Commercial Banks: the term used to differentiate a normal bank from an investment bank. In the United States after the Great Depression Congress allowed banks to participate only in banking operations, while investment banks were limited to the activities of the stock market.
Community banks: financial institutions operating locally that encourage workers to make local decisions to support their clients and partners.
Community development banks: regulated banks that provide under-served markets or communities with financial services and credit.
Land Development Banks: Land Development Banks (LDB) are the special banks offering long-term loans. LDB ‘s history is very old. At Jhang in Punjab in 1920, the first LDB was started. Promoting land development, agriculture and growing agricultural production are the key objectives of the LBDs. The LBDs explicitly provide members with long-term funding through their branches.
Credit unions or cooperative banks: depositor-owned, not-for-profit cooperatives that often provide more favorable rates than profitable banks. Membership is usually limited to a company’s workers, residents of a given area, members of a specific union or religious group, and their immediate families.
Postal savings banks: savings banks connected to the domestic postal system.
Private banks: banks that handle high-net-worth individuals’ assets. Historically, a minimum of US$ 1 million has been needed to open an account, but many private banks have reduced their entry barriers to US$ 350,000 for private investors in recent years.
Offshore banks: banks with low taxation and oversight, based in jurisdictions. Most offshore banks are private banks in nature.
Savings Bank: In Europe, in the 19th or sometimes even in the 18th century, savings banks took hold. Their initial aim was to provide all layers of the population with easily accessible savings items. Savings banks were established on the public initiative in some countries; in others, socially responsible individuals created foundations to put the required infrastructure in place.
Ethical banks: Banks that give priority to the transparency of all operations and only make investments which they consider to be socially responsible.
Bank accounts provide security. Bank accounts are stable. It’s a quick way to save money.