Banking

What Is a Bank?

A bank is a financial institution licensed to receive deposits and make loans. Banks may also provide financial services such as wealth management, currency exchange, and safe deposit boxes. There are several different kinds of banks including retail banks, commercial or corporate banks, and investment banks. In most countries, banks are regulated by the national government or central bank.Reference

Types

Retail banks(ICICI, Citibank) Commercial or corporate banks(ICICI, JPMorgan Chase, Bank of America) Investment banks(Morgan Stanley and Goldman Sachs) Central Banks(Reserve Bank of India, U.S. Federal Reserve Bank, the European Central Bank, the Bank of England, the Bank of Japan, the Swiss National Bank, and the People’s Bank of China)

Credit Union : a type of financial cooperative that provides traditional banking services and are created, owned, and operated by their participants. As such, they are not-for-profit enterprises that enjoy tax-exempt status.

Services

The following is a general list of services provided by a bank.

1. Current Accounts
2. Savings accounts
3. Overdraft Facilities
4. Financial Services
5. Investment Services
6. Foreign Exchange Facilities
7. Insurance Facilities
8. Mortgage Facilities
9. Pensions Schemes
10. Online Banking Facilities

Transactions

A transaction is a completed agreement between a buyer and a seller to exchange goods, services, or financial assets in return for money. Transactions occur in various forms. Some of which are :

1. Currency(supplemented by cheques, drafts, Banker's cheque, Payment order, Payable 'At Par' cheques such as Interest/Dividend warrants, refund orders, gift cheques etc.)
2. Negotiable Instruments:
   • Promissory note
   • Bill of Exchange
   • Cheque
   • Demand Draft
3. Bill of Exchange(Cheque)
4. Payment Orders
5. Travellers Cheques
6. Interest Warrant
7. Dividend Warrants
8. Money Order
9. Postal Order

Negotiable Instruments

Divided into prepaid and postpaid methods.

Pepaid methods are :

1. Demand Draft

Postpaid methods are :

1. Promissory note
2. Bill of Exchange
3. Cheque

Common Definitions

Accounting : the system of recording and summarizing business and financial transactions and analyzing, verifying, and reporting the results
Guarantor : a person or thing that gives or acts as a guarantee.
Currency : a system of money in general use in a particular country.
Telex : an international system of telegraphy with printed messages transmitted and received by teleprinters using the public telecommunications network