Araling Panlipunan

fundamental slang is the bank of a untaught a nation. Its main function is to going currency cognize as marge Notes. This bank acts as the leader of the banking system and m wholenessy market of the country by regulating silver and credit. These banks be the bankers to the government, they are bankers banks and the ultimate steward of a nations foreign exchange re fares. The aim of the of import rely is non to earn profit, but to maintain price stability and to strive for scotch nurture with all-round growth of the country There is now just now any country which does not have a central aver of its own.It acts as a great engine of growth of a State. In India, the RBI was established in 1935 and this Bank has since been functioning as the Central Bank of the country (this is not to be confused with Central Bank of India, which is only a commercial bank). The Central Bank of different countries is known by different names same(p) Reserve Bank in India, Bank of Eng put down in U. K. , Federal Reserve System in U. S. A. , and so forth (ii) Commercial Banks A bank, which undertakes all kinds of ordinary banking business, is called a commercial bank. It is so called because it appends property and credit for commercial and trade activities.They receive short and spiritualist term deposits from the public and grant short-term loans, and advances. They supply working hood to industries and enable them to carry on production and manufacturing activities. They grant loans and advances on the stocks of awkward commodities, industrial goods, etcetera They discount internal and foreign bills and thereby pay the International trade. They also effect certain agency services much(prenominal) as collection of cheques, dividends, interest on investments, issue of drafts, letter of credit, Travelers Cheques, enthr matchlessment Advisory Services, etc.(iii) industrial Banks or Financial Institutions An Industrial Bank is one which specialises by providin g loans and fixed capital to industrial concerns by subscribing to share and unsecured bond issued by public companies. They play an in-chief( have a bun in the ovennominal) role in the foundation and growth of industries. The block capital required for the acquisition of fixed assets, etc. , is supplied by investment banks. They return long-term loans and credits for periods varying in the midst of 5 and 15 years for industries to acquire fixed assets.They may serve as catalytic agents in mobilisation of capital in other forms of assistance such as, underwriting, guarantee, etc. These banks are nowadays grouped as breeding Financial Institutions. These banks are very popular in Ger many an(prenominal) and Japan. In India, we have several Industrial Finance Corporations in addition to the Industrial Development Bank of India. Both, Development Financial Institutions and Commercial banks, nowadays, finance infrastructural development activities, which include construction of transport facilities, building of power-supply stations, etc.(iv) deputize Banks (Authorized Dealers in unconnected Exchange) These types of banks are primarily engaged in transactions involving foreign exchange. They grapple in foreign bills of exchange import and export of bullion and otherwise participate in the financing of foreign trade. They do a turning of incidental services such as opening of garner of credit, issue of foreign Currency Drafts and Travellers Cheques and supply of information about foreign customers. They will credit and loans in foreign currency and also own deposits in Foreign Currency.They require huge capital and trained staff as it is a risky business. They maintain branches in foreign countries at important trade centres. In the past foreign banks operating in India would batch in foreign exchange and were known as exchange banks. Nowadays, many Indian banks freshet in foreign exchange with special government agency from Reserve33ank of Indi a and known as Authorised Dealers in Foreign Exchange. As per Foreign Exchange Regulation Act banks dealing in Foreign Exchange related activities require the permission of Reserve Bank of India.This is applicable to both Indian and Foreign Banks. (v) Co-operative Banks They are organized on co-operative principles of mutual assistant and assistance. They grant short-term loans to the agriculturists for purchase of seeds, harvesting and for other cultivation expenses. They accept money on deposit from and make (vi) Land-mortgage Banks ( currently known as agriculture and Rural Development Banks) They are agriculture development banks. The Land-mortgage banks supply long-term loans for a period up to 15 years for development of land to improve unsophisticated yields.They grant loan for permanent improvements in agricultural lands. They create negotiable bonds out of real estate like land, buildings, etc. They raise funds by floating debentures and by borrowing from the government. The market-gardening Finance Corporation was the first Indian Institution to set up finance for development of Agriculture. The National Bank for Agriculture and Rural Development (NABARD) was constituted by the Government to promote rural development. (vii) Indigenous BanksThe Central Banking Enquiry Commission defined an indigenous banker as an individual or firm accepting deposits and dealing in indigenous alter of money to the needy. They form unorganised part of the banking structure, i. e. , these are unrecognised operators in receiving deposits and lending money. In India the Marwaris, the Multanis, the Jains, the Sowcars, the Nattukottai chettiars are some of the leading indigenous bankers who charge higher(prenominal) ordains of interest on their lendings. In rural areas, they still provide substantial finance to agriculturists and small traders.(viii) Savings Banks These are institutions which collect the semiannual liverys of the general public. Their main object i s to promote thrift and saving habits among the middle and lower income sections of the society. They have certain restrictions on number of withdrawals in a year to discourage spending. In almost all countries, postal authorities also run nest egg bank accounts and their working is regulate by the government. The first savings bank was started in Hamburg in 1765. In India, we have postal savings accounts. These days separate savings banks as such are very rare.In India, all commercial banks have savings accounts. The minimum balance which is required to be kept in the accounts differs from banks to banks. The rate of interest payable on the accounts by banks is determined by RBI. Presently it is 4. 5 per cent per annum. Co-operative banks are normally allowed to pay an additional 0. 5 per cent interest per annum. Interest rate on savings accounts with post offices is determined by Government of India. (ix) Supranational Banks Special Banks have been created to deal with certain in ternational financial matters. macrocosm Bank is otherwise known as International Bank for Reconstruction and Development (IBRD) which gives long-term loans to developing countries for their economical and agricultural development. Asian Development Bank (ADB) is another Supranational Bank which provides finance for the economic development of poor Asian countries. They generally provide finance at concessional interest rates and for long-term needs. These institutions are the creations of World bodies promoted by various countries or central banks of different countries.The European Central Bank established in June 1998 by countries in the European sum is another example of Supranational Bank. (x) International Banks International Banks are those which are operating in different countries. While, the registered office/head office is situate in one country, they operate through their branches in other countries. They particularise in Banking business pertaining to foreign trade l ike opening of letters of credit, providing short-term finance in foreign currency, issue of performance guarantee, placement foreign currency credits, etc.They are the main traders in International Currencies like US dollars, Japanese Yen, the new-born European Currency Euro, etc. They also perform Currency Risk Management functions for clients. These banks are also known as Multinational Banks since, they operate from many countries. These banks make possible the flow of money/credit from one country to from the above, it can be understood that the miscellanea of banks cannot be rigid. We find that banks are providing finance in more than one field that is why, it is rightly said that they are Departmental stores of Finance.