Banking Procedure

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The term bank comes from the French word “Banco” which means a bench. A bank is a financial institution which deals with deposits and advances and other related services. It receives money from those who want to save in the form of deposits and it lend it to others. Functions of Commercial Bank

Primary Function:
The primary functions of bank are also knowns as banking functions . They are the main functions of a bank. Accepting Deposits
SAVING DEPOSITS
An persone can open an saving account by keeping a minimum deposit amount. Procedure
 Following documents to open a bank account:
1. Address proof
2. Identity proof
3. Photograph
4. Introducer
For address and Id proof you can use your driving license or passport or ration card. Most banks expect you to bring a friend or relative who already has an account with the bank as a gesture of trust.

CURRENT DEPOSIT
Any sane major person or a firm which can enter into contract can open an account with a bank. The following formalites are requires to be completed before a current or profit and loos sharing account is opened in a bank. First of all the person who is desirous of opening an account with the bank has to filling in the account opening form . The applicant writes his name, address, occupation and the amount to be deposited in the form. The applicant has to declare in the form that he shall comply with the bank rules., which are in force from time to time the conduct of the discount. The prospective customer is to provide his introduction to the bank either from the old customer of the bank or from persn known to the bank. The introducer or reference verifies the integrity, character, honesty and goodwill of the intending customer on the application form. When the banker is satisfied about the integrity of the customer he then agrees to open his account. FIXED DEPOSIT

Visit the bank for opening account to make the deposit. If account is there it is easier to open the FD else we need address and indentity proof. So we have to fill the form for keeping deposit and pay the money to cashier.

RD
The bank will provide the form , we have to fill the form and pay the money at bank teller counter. Once done bank officals will give a small passbook for RD with days date and amount paid up. Every monthe we need to go to bank to pay the RD amount. Granting of Loan and Advances

The bank advances loan to the business cimmunity and other members of th public. The bank loans and advances include Overdraft
It is given to current account holders
A certain amount is sanctioned as overdraft which can be withdrawn within a certain period of time say 3 months Interest is charged on actual amount withdrawn
An overdraft facility is granted against a collateral security. CASH CREDIT
The client is allowed cash credit upto a specific limit fixed in advance. It can be given to current account holders and to others who do not have a current account with the bank Separate cash credit account is maintained.

Discounting of Bills of Exchange
The bank can advance money by discounting or by purchasing bills of exchange both domestic and foreign bills, The bank pays the bill amount to the drawer of the bill by deducting usual ‘discount’ charges. Investments

The bank invest a part of the deposit money in bonds, debentures and other securities. Investment is profitable areas brings good returns to the bank. Secondary Functions
The bank acts performs a number of secondary functions, also called as non banking functions. The importance secondary functions are as follows.

Agency functions
The bank acts an agent of its customers.
Transfer of funds : The bank transfers funds from one branch to another or from one place to another. Collection of Cheques: The bank collects the money of the cheques through clearing sections of its customers. The bank also collects money of the bills of exchange. Periodic payments; On standing instructions of the client, the bank makes periodic...
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