A very common question asked is, “What is a bank?” There are many definitions of what a bank is, which we will shortly discuss. Understanding what banks do is very important. They have become a vital part of our lives now.
Definition
Many definitions of what a bank is have been provided. The one we shall discuss is easily understood. Basically it is a competent body which deals with money. It may also offer other financial services.
There are other functions of a bank. One can deposit money in a bank. They can also provide loans to qualified people. Banks can deduct a profit for themselves, from the, difference in the interest rates that is paid and charged.
Main Function
Banks are a vital part of a country’s economy. A bank’s main function is to take care of the deposited money. They can do this by re-investing the money. This is possible through the loans that a bank offers to other people.
Depositing Money
Once the money is deposited the bank has to take care of it. The bank keeps a record of an individual’s deposited money. The individual’s account shall be credited with the the respective amount deposited.
