The word bank is derived probability from the Latin word 'Banco' which means specially designed long bench which was used to perform financial transactions. In ancient times, the Jew the money lenders conducted their money lending business in Italy at specially designed 'Banco'. The ancestor of the modern banker may be The Merchants, money lenders, or GoldSmith.
Crowther : " A Bank collects money from those who have it to spare or who are saving it out of their incomes, and it lends this money to those who required it"
Walter Lifley : " A Bank is an Institution of individuals who is always ready to receive money on deposit to be returned against the cheque of their depositors".
In modern times, banks perform several other activities that decide deposit collection and lending. Banks have been growing with respect to not only their functions but also in terms of their types, dealing with different facts of money and credit. Modern banks accept deposits from the public, make funds available to those who need them, and help in the remittance of money from one place to another.
Types of Bank
Banks are divided into different kinds on the basis of functions, specialization, and nature. The types of a bank differ from country to country. Generally, the following are the types of banks on the basis of the function scope.
1. Commercial Bank
The Commercial bank is the oldest type of bank. In general, the bank is used to mean a commercial bank. It performs all kinds of banking business and generally finances trade and Commerce. The main objective of this bank is to, earn profit. This type of bank was initially established to provide short-term loans to traders. Hence, this bank is called a commercial Bank. Comerica Bank deposits in current savings and fixed Akanksha from the general public and institutions. It provides loans to individuals and institutions from deposits. The modern commercial Bank provides loans not only the traders but also to agriculture, industry, and services. Limited established on November 15, 1927, (Kartik 30 1994 B.S.) is Nepal's first commercial bank. It was formed under the principle of a joint venture (between the Government and the general public).
2. Central Bank:
The central bank is the apex monetary institution that controls, monitors, and supervises the banking structure of the country. It makes monetary management of the country and implements the monetary policy of the government. A Central bank is established in every country. This bank is established under complete government ownership. Its objective is not profit earning. The main function of it is money management and contributing to economic development. Sveriges Riksbank, or simply Riksbanken, establish in 1668 A,D. Is the central bank of Sweden. It is the world's oldest Central Bank and is still in operation. The bank of England established in 1694 is the second Central Bank in the world. Nepal Rastra Bank which was established in 2013 BS, under the NRB act 2012 B.S (1955 A.D) is the central bank of Nepal.
3. Industrial Bank
The bank established for the development of the industry is known as Industrial Bank. This Bank provides long-term loans and industrial consultancy for the establishment, development, and modernization of industries. It also purchases, sells, and underwriters the shares and debentures of industries. It also makes direct investments in industrial in case of need. It encourages industrial investments by providing information on industrial feasibility and by helping to Rise loans from the market. Since this Bank deals in shares and debentures and on the rides and invests in industries, this bank is also referred to as an 'investment bank'. Nepal Industrial Development Corporation (NIDC) was established in 1959 (2016 B.S.) as Nepal's Industrial Bank.
4. Agricultural Bank
The bank established for the development and modernization of the agriculture sector is called the agriculture Bank. It provides short-term loans for buying Manure, and small implements, and for payment of wages. It also provides long-term loans to purchase land, missionary, and expensive equipment. There are some other types of agriculture banks like land mortgage banks and cooperative banks. The land mortgage Bank provides loans to the farmers against the security of their lands. It provides long-term credit to buy agriculture machinery, equipment and making large improvements in the land. Agriculture Development Bank, established in 1968 A.D under the ADBN Act 1967 is the agricultural Bank of Nepal.
5. Development Bank
Development Banks are specialized financial institutions that are established to finance the development of specific sectors like the agriculture, industry, and ruler areas in the country. Development Banks generally provide medium from and long-term loans. But they also provide so drum loans for agriculture. Besides making available loans they also make available managerial and technical services. the rural development banks and development banks involved in microfinance are established to provide banking services to the rural poor. the rural poor deposit their saving both individually and collectively. they receive collective loans without collateral and personal loan on the basis of personal collateral.
6. Rural Bank
The concept of Rural Bank was developed in Bangladesh in 1976 A.D as Grameen Bank by Prof. Muhammad Yunus. It won him Nobel Peace Prize in 2006 A.D. Roller bank is a financial institution which is established to provide banking services to the rural people. It provides micro Finance facilities to the rural people. Generally, it is based on the concept of Banking to the rural poor. The rule can obtain loans from ruler bank on easy term and on group guarantee basis without security. One of the main objectives of rural banks is to alleviate rural poverty. Germeen Bikas Bank, Nirdhan Utthan Bank, etc. are the banks operating in Nepal.
7. Saving bank
The savings bank is established to collect the scattered savings of low-income people. On the one hand, It increases capital formation by mobilizing small savings. On the other hand, It encourages savings among low-income people. In reality, it is not a bank at all. The man, who deposits money in the bank can withdraw only a defined amount each week.
8. Exchange Bank
The bank established to deal in foreign currency is called an exchange Bank. Its objective is to help in international trade. This Bank provides loans to importers by discounting their bills and remits the money of importers to their parties. This task is undertaken either through its own branch in foreign countries or through correspondent banks. There is no separate exchange Bank in Nepal. The foreign exchange is controlled by Nepal Rastra Bank.
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