Introduction Of Banking : The Bank Of India Essay

The Merriam Webster dictionary defines the noun “bank” as “an establishment for the custody, loan, exchange, or issue of money, for the extension of credit, and for facilitating the transmission of funds.” In essence it is an institution that serves as a medium of flow of funds between users and savers. A bank is a financial institution that links the flow of funds from savers to users and back. For the purpose of this audit report we will broadly classify banks into two major categories: commercial banks and investment banks.

The banking industry has over the years evolved from simple to large and complex organization. They have grown from one street building into having multiple branches some of which are international. Their clients range from individual and institutions to governments and other banks. Banks do not manufacture physical things. Their work is simply services for money (Koch & MacDonald 2010). Such services include storing, lending and managing money. All people and institutions, as well as governments, need money to operate accordingly.

Lending institutions have been around since the late 1700’s. Banks are establishments that are authorized by the government to accept deposits, pay interest on deposits, clear checks, make loans, act as an intermediary in financial transactions and provide other financial services to customers.

Retail banking is, however, quite broad in nature - it refers to the dealing of commercial banks with individual customers, both on liabilities and assets sides of the balance sheet. Fixed, current / savings accounts on the liabilities side; and mortgages, loans (e.g., personal, housing, auto, and educational) on the assets side, are the more important of the products offered by banks. Related ancillary services include credit cards, or depository services. Retail banking refers to provision of banking services to individuals and small business where the financial institutions are dealing with large number of low value transactions. This

Banks have been around since hard money came to be. This was in the Ancient Empires of Greece, Egypt and Rome. However, banks at that time weren’t as the ones we know today because first, banks were only used by wealthy people. Then the term banks comes from those wealthy people storing their coins in their temples where they trusted the noble priests that lived there.

The Bank of United States has a profound history indeed. The bank was established in 1791 to act as a storae place for federal funds as well as the government’s monetary agent. This bank was initially proposed by Alexander Hamilton and was granted a twenty-year charter by Congress. This would not go over very well with the Jeffersonians due to the fact they believed the bank represented dominance of mercantile over agrarian interest and unconstitutional use of federal power. (footnote) The first Bank of United States however did open in Philadelphia in 1791 with branches in eight different cities. The bank conducted general commercial business as well as acting on behalf of the government. The bank appeared to be a triumph as it was managed well and was actually very lucrative.

These banks should ideally be divested of any sort of commercial interest, and must act in the best interest of its nation’s economic stability. A lot of meaning is carried out in being identified as ‘independent’ authority, where the bank possess powers to take its own decisions, approve its own legislature, follow its own policies and offer stability to the nation’s economy.

Banks can be described as a financial institution where deposits are accepted and credited from the public. There are very essential in the financial systems as it influences the economy of a country. Most of the countries follow a system which is known as fractional reserve form of banking. Under this policy banks holds liquid assets which is equal to only a part of your current liabilities. These institutions are subjected to minimum capital standard which is called Basel Accords. Banks are specific place which will ensure that your finances are secured.

A bank is an institution that facilitates financial transactions between the parties. Amongst its standard operations are accepting deposits from the customers, lending money as loan (cite). The major source of income for banks is interest income which is earned on loans given to the customers, business firms and corporations. This very nature of it makes banking institutions so crucial for economic development of any country. Strong banking operations and fundamentals paves the way for higher customer and investor confidence in the company.

On February 23, 1784, a small advertisement appeared in The New York Packet, one of the many New York newspapers of that era. This advertisement announced that prominent New York citizens had established a bank. The bank, established by the prominent, would not officially open for business until June 9, 1784. That bank would come to be known as the bank of New York. Alexander Hamilton, a well-known New York attorney, was asked to write the constitution of the new bank. He complied and therefore Alexander Hamilton was credited with the founding of the Bank of New York. The Bank of New York is the oldest bank in New York and along with that is one of the oldest banks in the world since banking

Banks are the most significant players in the Indian financial market. They are the biggest purveyors of credit, and they also attract most of the savings from the population. Dominated by public sector, the banking industry has so far acted as an efficient partner in the growth and the development of the country. Driven by the socialist ideologies and the welfare state concept, public sector banks have long been the supporters of agriculture and other priority sectors. They act as crucial channels of the government in its efforts to ensure equitable economic development.

Banking is an old aged idea. It was around in the ancient Mesopotamia era. Martin A. Armstrong states, Mesopotamia illustrated all the modern practices such as, deposits, interests, loans, and letters of credit.” Armstrong also mentions how the ancient Egyptians showed signs of the banking. To quote Armstrong, “Egyptian sources also show that a vibrant banking industry emerged whereby the state provided warehouses in which farmers deposited their grain. In turn, the farmer would receive a “deposit receipt” reflecting how much wealth was held by the bank in question. Such written receipts eventually became used as a general method of making payment of debts to third parties during the Ptolemy era including trade, taxes and donations to the gods.” These banking ideas can be linked to money and how money has changed the power of people and countries. It can be proven throughout the history of that money, power, and banks are directly related. The banks and money relate to power because the more economic strength a country has the more they can do military wise. It can also be proved over time that money and power create issues that can be counterproductive to society.

Indusland Bank established in April 1994 derives its name from Indus Valley Civilisation. The bank is first among its new generation private sector bank that obtained a license in the year 1994 to drive the process of economic reforms in the post liberalisation era in India. Conceptualised by Srichand P. Hinduja, the Indusland Bank was born from his vision to use collective contributions from the worldwide as non-residents Indian (NRI) community towards social and economic development of the country.

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Sparing cash in India in the present day sense began in the latest numerous years of the eighteenth century. The among the first banks were Bank of Hindustan, which implicit 1770 and traded in 1829-32; and General Bank of India, secured 1786 yet failed in 1791. The greatest bank, and the most settled still in vicinity, is the State Bank of India. It started as the Bank of Calcutta in June 1806. In 1809, it was renamed as the Bank of Bengal. This was one of the three banks backed by an organization government, the other two were the Bank of Bombay and the Bank of Madras. The three banks were merged in 1921 to structure the Imperial Bank of India, which upon India 's opportunity, transformed into the State Bank of India in 1955. For quite a while the organization banks had gone about as semi national banks, as did their successors, until the Reserve Bank of India was made in 1935, under the Reserve Bank of India Act, 1934. In 1960, the State Banks of India was given control of eight state-related banks under the State Bank of India (Subsidiary Banks) Act, 1959. These are presently called its accomplice banks.