Gujarat BoardEnglish MediumSTD 12 CommerceEconomicsBANKING AND MONETARY POLICY3 Marks
Question
Define banks and explain briefly.
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Answer
Banks:
Banks are commercial/financial institutions whose main function is to receive deposits from people and lend them for investment purpose
People deposit their excess money i.e. savings in the bank in return of which the bank provides them interest.
The main services that bank provides to people are depositing money in the form of savings account or fixed deposits, giving loans, transferring money from one account to other, receiving $LPG$ subsidy, cheque payment and withdrawal, like purchasing of assets like car and furniture, debit cards, credit cards, Internet banking, $DEMAT$ account, etc.
Definition:
‘A bank is an institution which provides services of banking.’
‘Bank is an institution authorized to collect peoples’ savings/deposits with the purpose of lending those; under the condition of returning the same when the depositor demands’.
‘A bank is a commercial organization that functions for profit. It accepts peoples’ savings in the form of deposits and pays interest in return. It ensures the safety of these deposits, lends money from these deposits to people who need money by charging them with interest and invest the surplus funds for development of the nation.’
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