A bank is a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. A bank links together customers that have capital deficits and customers with capital surpluses. Due to their importance in the financial system and influence on national economies, banks are highly regulated in most countries. Most nations have institutionalized a system known as fractional reserve banking, under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity, banks are generally subject to minimum capital requirements based on an international set of capital standards, known as the Basel Accords.
"A banker ... is a trader who buys money, or money and debts, by creating other debts, which he does with his credit - exchanging for a debt payable in the future one payable on demand…………….. the United States Supreme Court (Austen) "A banker (is) a dealer in capital, or, more properly, a dealer in money. He is an intermediate party between the borrower and the lender. He borrows of one party and lends to another."……….. the United States Supreme Court (Austen) Banking: In general terms, the business activity of accepting and safeguarding money owned by other individuals and entities, and then lending out this money in order to earn a profit. Classification of banks: (Ownership Basis)
State Owned bank: A public bank is a bank, a financial institution, in which a state or public actors are the owners. It is a company under state control. Private Banks are banks owned by either an individual or a general partner(s) with limited partner(s). Private Banks are not incorporated. In any such case, the creditors can look to both the "entirety of the bank's assets" as well as the entirety of the sole-proprietor's/general-partners' assets. There were many private banks in Europe, but most have now become incorporated companies, so the term is rarely true anymore. Today, the term "private bank" can also refer to the financial institution specializing in financial advice and services for high-net-worth individuals (private banking). "Private Banks" can also refer to non-government owned banks in general, in contrast to government-owned (or nationalized) banks, which were prevalent in communist, socialist and some social democratic states in the 20th century Govt & Private Banks are banks owned by both govt. and private sector. Autonomous Bank: Autonomous or semi-autonomous banking organization entrusted by a government to administer certain key monetary functions, such as to (1) issue, manage, and preserve value of the country's currency, (2) regulate the amount of money supply, (3) supervise the operations of commercial banks, (4) and serve as a banker's bank and the local lender of last resort.
Classification of banks: (Function Basis)
Central bank: A central bank, reserve bank, or monetary authority is an institution that manages a state's currency, money supply, and interest rates. Central banks also usually oversee the commercial banking system of their respective countries. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the amount of money in the nation, and usually also prints the national currency which usually serves as the nation's legal tender. Examples include the European Central Bank (ECB) and the Federal Reserve of the United States. The primary function of a central bank is to manage the nation's money supply (monetary policy), through active duties such as managing interest rates, setting the reserve requirement, and acting as a lender of last resort to the banking sector during times of bank insolvency or financial crisis. Central banks usually also have supervisory powers, intended to prevent bank runs and to reduce the risk that commercial banks and other financial institutions engage in...
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