Banking Services

Terms like bank and banking are applied to businesses and institutions that are considerably different in functions, methods and character. Alongside, These Businesses and institutions have certain features in common. We can better understand these common features and differences by having clear discussion about their services.

Banking Services:

From the customer point of view, Banking services are grouped as:

• Making of Payments.
• Safekeeping of money and other valuables.
• Making of loans and Investments.

The practice of intrusting to banks is for safekeeping of money and other valuables like jewelry, documents; plate etc is widespread and universal. Safekeeping of money obviously leads to another service i.e. payments. In case, if we have to make payments to people in other cities, in other countries and at home, we generally order our bank to perform the service on behalf of us. Loans of almost all kinds including short term and long term loans are made by banks. Short term loans are those helpful in day to day activities for the conduct of commerce & industry and such loans can be almost exclusively offered by banks. Banks also play big role in offering long term loans.

Banking Institutions services are not just confined to any one of the above mentioned services but specialize in performing all services or any combination. It involves certain practices, methods, machinery and assumption of a role in the nation’s economy, which has these institutions as objects of legislation and scientific treatment. Banking institutions can play role in investments of capitals and intermediaries in exchanges. Banks serve as distributing brokers for the money that comes from different sources. The practice of safekeeping of excess money and make payments resulted in confidence of public and thus responsibility in utilizing all the sources of money supply.

Classification of Banks: Typically they are classified into two types based on their nature of operations. 1) Commercial Banks. 2) Investment Banks.

Commercial Banks are more dedicated to conduct the exchanges. Mortgage Banks, Savings Banks, Bond houses are the important subclasses under Investment banks. Mortgage banks play intermediary role between the capitalists and general public interested to invest in land, Agriculture and Building operations. Commercial banks role is not limited to banking and includes issuing banknotes, Payments by telegraphic transfer, cheques, term deposits, Overdraft, letters of credit (trade finance), guarantees, performance bonds, securities underwriting, safe deposit boxes for Documents and other items, currency exchange, financial activities like sale, distribution or brokerage, with or without advice, of insurance, unit trusts etc.

Types of Retail banks:

• Commercial banks
• Community Banks
• Community development banks
• Postal savings banks
• Private banks
• Offshore banks
• Savings bank
• Building societies
• Landesbanks
• Ethical banks
• Islamic banks

Banking channels to avail the banking services are Branches, ATM (Automatic Teller Machine), Mail, Telephone Banking, Online Banking, Mobile Banking, Video Banking.