importance of essay in bank

Essay On Bank

Essay on Bank

500+ words essay on bank.

Banks are an integral part of the modern economy. They play a major role in the economic growth and development of a country. The idea of banking evolved with the idea of money. In India, public sector banks (PSBs) have been working to provide banking services in urban and rural areas since 1970. These public sector banks account for nearly 70% of banking activity in India. With the help of this essay on banks, students will get to know the functions performed by banks and their importance for individuals and the country. To help students in improving their essay-writing skills, we have also compiled a list of CBSE Essays on different topics. By practising these essays, they can boost their writing skills and also score good marks on the English exam.

Meaning of Bank

Banks are mainly linked to depositing and lending money. In Indian society, moneylenders used to give money to people in ancient times. They charged a high rate of interest to people as there were no banks or banking systems available at that time. But, with the change in time, the banking system was introduced in India. Now, we have public sector banks and private banks.

A bank is a financial institution that deals with deposits, withdrawals and other related banking services. Bank receives money from those who want to save in the form of deposits, and it lends money to those who need it. A bank is a financial institution that works as an intermediary to accept deposits and channels those deposits into various lending activities. It does so through loans or capital markets. A bank establishes the connection between the customers who have capital surpluses and those with capital deficits. In India, all banks operate under the guidelines of the Reserve Bank of India, which is known as the banker’s bank.

Functions of Bank

Banking is the lifeline of the modern economy. It has played a very important role in the economic development of all the nations of the world. We can not think of modern commerce without banking. Banking is a business which seeks profits like any other business. The banking business mainly constitutes borrowing and lending as their basic functions. Now, banks are providing many other services to people, such as net banking, online shopping, mobile banking, granting loans and advances, short-term credit, pension payments, acting as a dealer in foreign currency etc. A common person can safely deposit their money in the banks.

How Important are Banks for Development?

Banks are the most important financial pillars. They play a vital role in the economic development of a country. The financing requirements of industries, trades, agriculture and other business are met with the help of banks. Therefore, if the banking system of a country becomes strong, then the development of the country will also be at a faster rate. In today’s economy, banks are not only dealing with money, but they are also contributing to the development of the nation. They play a crucial role in the disbursement of credit and the mobilisation of deposits to various sectors of the economy. Banks also represent the economic health of the country. The strength of a nation’s economy depends on the strength of the financial system, which depends on the banking system.

In India, banks play a crucial role in the social and economic growth of the country after independence. The banking sector in India accounts for more than half the assets of the financial sector. The Indian banks have shown much growth after the implementation of financial sector reforms.

Banks are the backbone of any country’s economy. They are responsible for running the economy and controlling the price of the markets. They perform various important functions. However, there are default NPAs, cases of corruption and security threat-related issues, but these can be resolved by implementing strict laws and rules by the government.

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Published August 6, 2020

What is a bank’s role in community financial literacy?

Note: This article was written by Community Bank Senior Vice President of Retail Banking Hal Wentworth and was originally published in the Central New York Business Journal on July 29, 2019.

Financial literacy is defined as possessing the financial expertise needed to make healthy financial choices. It’s a topic that is extremely important for all ages, but often can be overlooked. As a financial institution, how can a bank contribute to the financial literacy and continued learning of its customers and its community? The need is apparent, making it a perfect time to reflect on this topic.

The importance of financial literacy

Financial literacy isn’t about being able to understand complex balance sheets or becoming an expert in wealth management. It’s truly about learning how take on your everyday financial decisions responsibly — from learning how to effectively budget and manage your checking account to understanding how credit cards work and staying out of debt. No matter what your level of financial expertise is, there is always room to learn more.

The role of banks

Financial literacy is important to the continued success of any community and something that can constantly be improved. As a financial institution, banks play an important role in promoting this ideal. We have our finger on the pulse of our communities, and we know the opportunities and are invested in the future. There’s no better way to demonstrate that a commitment than through the promotion and encouragement of financial literacy and continued life-long learning.

The impact of financial literacy is far reaching and can help the economy stay healthy and continue to grow. It can lead to a stronger local economy, more local businesses, and increased spending.

Be a catalyst for change

Financial literacy is all about having the knowledge and understanding to make informed and effective decisions about your finances. Therefore, improving financial literacy starts with education.

This is especially true when it comes to children. Financial-literacy programs for students are an important tool to improve the financial capability of our youth and communities. As a trusted money partner to the communities we serve, banks should provide educational tools and resources to help equip the next generation with the knowledge to lead fiscally responsible lives.

That includes partnering with schools to help educate students in varying grades on making spending decisions, the value of money, and the difference between want and need. It’s important to help our neighbors make sound financial decisions through all stages of life.

Banking is rooted in people. The decisions we make with customers can have a profound impact not only on their lives, but on our community. In the end, banks are people helping people, and it’s important to understand the potential impact a bank can have. When our communities succeed, we all succeed.

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Essay on Bank: Origin, Meaning and Functions | Banking

After reading this article you will learn about:- 1. Origin and Development of Bank 2. Meaning and Definition of Bank 3. Classification 4. Functions 5. Advantages or Importance.

Origin and Development of Bank:

There is no unanimity of opinions about the origin of the word ‘Bank’. According to some monetary experts, the word ‘Bank’ is derived from ‘Banco’. ‘Bancus’, ‘Banque’ or ‘Banc’ all of which mean a bench upon which the early moneylenders used to display their coins and transact business across the bench in the market place. Banks in past used to be known as seths, shroffs, goldsmiths, etc.

Banks are indispensable in every walk of life. Banks are the nerve centre of trade, commerce and business of an economy. Banking plays a very important role in the economic development of all the nations of the world. In fact, banking is the life-blood of commerce.

Meaning and Definition of Bank:

A bank as understood in the present day world in simple language is an institution which deals in money. Broadly speaking, banks draw surplus money from the persons who are not using it at the time and lend to those who are in a position to use it for productive purposes.

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The important definitions of ‘Bank’ are given below:

1. According to Prof. Sayers – “Bank is an institution whose debts (bank deposits) are widely accepted in settlement of other people’s debts to each other.”

2. According to Dr. H.L. Hart, “A bank is one cho, in the ordinary course of his business, honours cheques drawn upon him by persons from and for whom he receives money.”

3. According to Findlay Shiras, “Bank is as a person, firm or company having a place of business where credits are opened by the deposit or collection of money or currency subject to be paid or remitted upon drafts, cheques or orders or where money is advanced or loaned or stocks, bonds, bullion and bills of exchange and promissory notes are received for discount and sale.”

4. According to Crowther, “A banker is a dealer in debts, his own and of others.”

5. According to Kinley, “Bank is an establishment which makes to individuals such advances of money or other means of payment as may be required and safely made and to which individuals entrust money or means of payment when not required by them for use.”

6. According to Banking Regulation Act, 1949, “The word banking as “the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise and with draw able by cheque, draft, order or otherwise.”

From the above definitions of bank we come to the conclusion that bank is an institution which deals in cash and credit.

Classification of Banks:

Commercial banks are the most important type of these institutions. Besides the commercial banks there are central bank, industrial banks, co-operative banks, etc. These different institutions conduct their operations in a different manner.

The banking institutions can be classified into following types on the basis of their functions:

1. Commercial Banks:

These are the most common and important type of banking institution. A commercial bank is a monetary institution which serves the interest of its depositors by providing with security vaults for the surplus resources and, on the other hand, makes profits by investing its resources in the productive measures by extending loans.

Commercial banks may be owned by the government or they may be run in the private sector. For instance, 20 major commercial banks are nationalised in India. The other private sector banks are organised on the lines of a Joint Stock Company. Commercial banks are therefore dealers in loanable funds of the community.

2. Industrial Banks:

These banks have come up for the promotion of new industrial concerns. Industrial banks or investment banks provide medium and long-term loans and also supply fixed capital to the industrial concerns by subscribing to the shares and debentures of the industrial enterprises. Indian Finance Corporation and Investment Corporation of India are the examples of industrial banks in India.

3. Exchange Banks:

Exchange banks are those banks which deal in foreign exchange, that is, to convert the rupee into foreign currencies and vice versa. Dealings in foreign exchange are also handled by the commercial banks. In our country, dealings in foreign exchange are conducted by the foreign exchange banks as well as Indian commercial banks.

4. Co-Operative Banks:

Co-operative banks have been set up to meet the requirements of very poor farmers and small scale industrial concerns.

These banks are classified in two groups, such as:

(i) Central Co-Operative Banks:

Members of these banks can be individual or the societies. These banks can get capital resources from their shares, from public deposits and also get loans from the State Co-operative Banks.

(ii) State Co-Operative Banks:

These banks are also called ‘apex banks’. Their area of operation extends over a state. These banks get short and medium- term loans from the Reserve Bank of India. The co-operative banks play a very useful role in agriculture credit.

5. Land Mortgage Banks:

These banks provide long-term credit to farmers and agriculturists against the security of their land. The loan is extended for the purchase of tools, implements, equipments and for financing permanent improvements with a view to increase yield from land. These banks raise their resources in the form of shares and by issuing of long-term debentures.

6. Central Bank:

At present there in no country in the world, which has not set up a Central Bank of its own. A Central Bank is so-called because it occupies a central position in the monetary and banking system of a country and is the highest financial authority. It is the apex bank and the statutory institution in the money market of a country.

In India, it is named Reserve Bank of India. The main function of this bank is to regulate and supervise the whole banking system. It is banker’s bank and controller of credit in the country. Now a day’s Central Bank in every country has been given the sole right of note-issue. It is a lender of last resort and custodian of foreign balances of the country.

According to Prof. Dudly Johnson, “A Central Bank is an institution charged with the responsibility of regulating the supply and cost of money in the interests of the general public.”

7. Saving Banks:

These institutions have been set up to promote the savings of the middle income group of the society. In our country, postal saving banks arc a good example of such banks. These banks collect the small savings of the public and operate savings accounts. Savings accounts are also operated by the Indian commercial banks.

8. Indigenous Banks:

These banks have been called by different nams in different parts of the country, such as, seths, shroffs, mahajans, sahukars, chettis, etc. The indigenous bankers generally lend money and finance the internal trade of our country. The rate of interest is comparatively higher.

9. Regional Rural Banks:

Rural banks, meant for the development of rural economies, have been established by the Central Government at the request of commercial banks who have sponsored such proposal and are called the Sponsor Banks. Each rural bank will have an authorised capital of Rs. 1 crore and issued and paid-up capital of Rs. 25 lakhs. These banks grant loan to small farmers, small entrepreneurs and agricultural labourers.

Functions of a Bank:

The functions/services of a bank may be categorised in the following heads:

1. To Receive Deposits:

To receive money from the public is an important function of a bank. There are many people who have surplus funds but cannot use their funds profitably or ideally. They deposit these surplus funds with the bank.

Deposits are received by the banks in the following three forms:

(i) Fixed Deposits:

Fixed deposits are known as Time Deposits. Under fixed deposits money is deposited for a fixed period and cannot be withdrawn before the expiry of the time as decided by the customer. These deposits fetch comparatively higher rate of interest.

(ii) Current Deposits:

These are mainly concerned with businessmen who have to visit the bank every now and then for the purposes of money transactions. Current deposits can be withdrawn any time by any amount. Generally no interest is paid on such deposits.

(iii) Saving Bank Deposits:

The main objective of saving deposits is to encourage saving among the persons. The rate of interest on such deposits is 5 percent. Some banks have placed restrictions on the number of withdrawals but others permit free withdrawal policy.

2. To Lend Money:

This is one of the important functions of a bank. It is also the chief source of profit to most of the banks. Banks accept deposits from those who have surplus money and grant loans and advances to those who need them. Banks charge comparatively higher rate of interest on the amount advanced as a loan.

Loans are advanced by the bank in the following forms:

(i) Cash-Credits:

Banks may advance cash-credits. This system of granting cash-credits is very popular in Scotland. According to H.D. Macleod, “Cash-credit is to Scotland what the river Nile is to Egypt, a fertilizer.” Cash-credits in India are not given against the personal security of the borrower. On the other hand, cash- credits are based on the promissory notes of the borrowers backed by the collaterals like shares, stocks, bonds or goods.

(ii) Overdrafts:

It is a temporary help being extended by the banks. ‘Overdraft’ means giving money in excess of the deposits of the depositor. Secured overdrafts are granted against several types of securities. The interest is charged on daily overdrawn balances.

(iii) Loans and Advances:

Banks also advance loans to businessmen, consumers, farmers-, etc. In case of a loan, a specified amount is sanctioned by the bank to the customer. The borrower is required to pay interest on the entire amount of loan from the date of sanction.

(iv) Discounting of Bills and Hundies:

The bank may also lend by discounting bill of exchange. Discounting a bill of exchange amount to the advancing of a loan against a promise to pay in future. This is the most popular method of lending by the commercial banks as the loans are self-liquidating.

3. Agency Functions:

Apart from lending and investing activities, the banks perform a number of useful services for their customers. In doing so, banks act as agents to their customers.

These services include the following:

(i) The banks remit funds on behalf of their clients, by mail transfer or drafts.

(ii) The banks also collect and pay the cheques, bills, promissory notes, dividend warrants, subscriptions, rents, insurance premium and other periodical receipts and payments of their clients.

(iii) Banks also sell and purchase shares, stock, debentures and bonds etc. on behalf of their customers.

(iv) Commercial banks also act as executors, trustees and attorneys for their customers.

(v) Banks also help their customers to get refund of income-tax, if any.

4. Other Functions:

In addition to the above functions being performed by commercial banks, a large number of other functions called ‘miscellaneous services’ are also being rendered by these banks.

(i) Issuing of letters of credit to their customers to help and enable them to go abroad.

(ii) Receiving the valuables, ornaments, jewels and documents of their customers.

(iii) Issuing of bank drafts and traveller’s cheques in order to facilitate the transfer of funds from one part of the country to the other.

(iv) The commercial banks also do the underwriting business.

(v) The banks also collect statistical information pertaining to trade, commerce and industry.

(vi) Furnishing guarantees on behalf of customers.

Advantages or Importance of a Bank:

Banks are the nerve centre of trade, commerce and business in a country. Banking is the life-blood of modern commerce. Banking plays a very important role in the economic development of all the nations of the world. There are a large number of banks which are working in all types of economic systems in the world. Banks are beneficial for all.

The main advantages of banks are as follows:

1. To Cultivate Habit of Saving:

Banks cultivate the habit of savings in the public. Savings in the bank on the one hand are safe and on the other hand earn interest for its depositors are prompted to save and deposit in their bank accounts. This is the main advantage of a bank.

There is always a risk in keeping cash with one’s own self. The money with the bank remains in safe custody. Every businessman likes to keep money with the bank to avoid the risk.

3. Facility in Making Payments:

It is also an important function of a bank. Payments are greatly facilitated through cheques which is always convenient and safe and avoids disputes. There is no need of counting money, when payment is made by means of cheques.

4. Collection of Cheques, etc.:

Banks also collect the amount of cheques, drafts, bills of exchange, etc. on behalf of their customers.

5. Securing Loans and Overdrafts:

Banks grant loans and credit facilities to the people. In this way, banks help merchants and traders. Banks also allow overdraft facilities to their customers. Under overdraft facilities the bank allows its customers to over-draw his current account upto an agreed limit.

6. To Provide Credit Information and Letter of Credit:

Banks provide information relating to the creditworthiness of their customers. Whenever anybody wants to know the financial position of a business, he is referred to its banker, who supplies him the detailed information. Banks also issue letters of credit to their customers to help and enable them to go abroad.

7. Safety of Valuable Articles:

Valuables, jewels, ornaments, documents, deeds, etc. can be put in the bank for safe custody. Banks provide lockers to their customers to store these valuable articles.

8. Representation and Correspondence:

Many a time banks procure passports, tickets for their customers and act as their representatives. Banks also make correspondence on behalf of their customers.

9. Sale and Purchase of Securities:

Banks also sell and purchase shares, stocks, debentures and bonds etc. on behalf of their customers.

10. Other Services:

In addition to the above mentioned services banks also provide various other services to their customers, such as-collection and payment of dividends, bills etc., remittance of funds, payment of insurance premium, travellers’ cheques, etc.

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Financial Literacy
Financial Literacy Resource Center

Financial Literacy: What It Is, and Why It Is So Important To Teach Teens

Education is the key to a successful financial future

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What Is Financial Literacy?

Understanding financial literacy.

Why It Matters

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Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing.

When you are financially literate, you have the essential foundation for a smart relationship with money. This can help start a lifelong journey of learning about the financial aspects of your life. The earlier you start to become financially literate, the better off you'll be because education is the key to a successful financial future.

Key Takeaways

The term “financial literacy” refers to understanding a variety of important financial skills and concepts.
Financially literate people are generally less vulnerable to financial fraud.
A strong foundation of financial literacy can help support various life goals, such as saving for education or retirement, using debt responsibly, and running a business.
Key aspects of financial literacy include knowing how to create a budget, plan for retirement, manage debt, and track personal spending.
Financial literacy can be obtained through reading books, listening to podcasts, subscribing to financial content, or talking to a financial professional.

Investopedia / Paige McLaughlin

Since about 2000, financial products and services have become increasingly widespread throughout society. Whereas earlier generations of U.S. residents may have purchased goods primarily in cash, various credit products are popular today, such as credit and debit cards and electronic transfers. A 2021 survey by the Federal Reserve Bank of San Francisco revealed that 28% of all payments were made via credit card, with only 20% being made in cash.

Given the importance of finance in modern society, a lack of financial literacy can be very damaging to an individual’s long-term financial success.

Pitfalls of Illiteracy

Being financially illiterate can lead to many pitfalls, such as being more likely to accumulate unsustainable debt burdens, either through poor spending decisions or a lack of long-term preparation. This, in turn, can lead to poor credit , bankruptcy, housing foreclosure , and other negative consequences.

Thankfully, there are now more resources than ever for those wishing to educate themselves about financial topics. One such resource is the U.S. government-sponsored Financial Literacy and Education Commission, which offers a range of free learning opportunities.

Financial literacy can help protect individuals from becoming victims of financial fraud, a type of crime that is becoming more commonplace.

Scope of Financial Literacy

Although many skills might fall under the umbrella of financial literacy, popular examples include household budgeting, learning how to manage and pay off debts , and evaluating the tradeoffs between different credit and investment products. These skills often require at least a working knowledge of key financial concepts, such as compound interest and the time value of money.

Financial literacy can cover short- and long-term financial strategies. The strategy you use will depend on several factors, such as your age, investment time horizon, and risk tolerance . Financial literacy also encompasses knowing how investment decisions made today will impact your tax liabilities in the future.

Financial products such as mortgages, student loans, health insurance, and self-directed investment accounts have grown in importance. It is imperative for individuals to understand how to use them responsibly. It's also important to know which investment vehicles are best to use when saving, whether for a financial goal like buying a home or for retirement.

Other developments in finance such as e-wallets, digital money, and P2P lending can be convenient and cost-effective but require that consumers be educated adequately to use them to their advantage.

Why Financial Literacy Matters

It supports financial well-being.

Day-to-day living expenses, living within your means, short-term borrowing, long-term budget forecasting. To manage these and other essential financial realities properly as you go through life, you must be financially literate.

It is important to plan and save enough to provide adequate income in retirement while avoiding high levels of debt that might result in bankruptcy, defaults, and foreclosures.

In its "Economic Well-Being of U.S. Households in 2022" report, the U.S. Federal Reserve System Board of Governors found that many Americans are not prepared for retirement. Twenty-eight percent indicated that they have no retirement savings, while about 31% of those not yet retired felt that their retirement savings were on track. Among those who have self-directed retirement savings, about 63% admitted to feeling low levels of confidence in making retirement decisions.

Millennials' Challenge

Lack of financial literacy has left millennials—the largest share of the American workforce—unprepared for a severe financial crisis, according to research by the TIAA Institute. Even among those who reported having a high knowledge of personal finance , only 19% answered questions about fundamental financial concepts correctly.

Forty-three percent reported using expensive alternative financial services, such as payday loans and pawnshops. More than half lacked an emergency fund to cover three months’ of expenses, and 37% were financially fragile (defined as unable or unlikely to be able to come up with $2,000 within a month in the event of an emergency).

Millennials also carry large amounts of student loan and mortgage debt. In fact, 44% of them said they have too much debt.

Though these may seem like individual problems, they have a wider effect on the entire population than previously believed. The lack of knowledge of mortgage products prior to the 2008 financial crisis created widespread vulnerability to predatory lending . The financial impact of that crisis affected the entire economy.

Financial literacy is an issue with broad implications for economic health.

If you are a younger individual, retirement may seem years away. Yet it is one of the best goals to begin saving for. That's because the earlier you start, the longer your invested savings will have to compound and the more money you'll end up with. An employer-sponsored retirement account, such as a 401(k) , can help.

Benefits of Financial Literacy

Broadly speaking, the benefit of financial literacy is that it empowers individuals to make smarter decisions about their finances. In addition:

Financial literacy can prevent devastating financial mistakes : Floating rate loans may have different interest rates each month, while traditional individual retirement account (IRA) contributions can’t be withdrawn until retirement. For someone unaware of these and other financial facts, seemingly innocent financial decisions may have long-term implications that cost them money or impact life plans. Financial literacy helps individuals avoid making mistakes with their personal finances.
Financial literacy prepares people for financial emergencies : Topics such as saving or emergency preparedness get individuals ready for uncertain times. Though losing a job or having a major unexpected expense can be financially impactful, an individual can cushion the blow by saving regularly.
Financial literacy can help individuals reach their goals : By better understanding how to budget and save money, individuals can create plans that define expectations, hold them accountable to their finances, and set a course for achieving important financial goals. Though someone may not be able to afford a dream today, they can create a plan that can help make it happen.
Financial literacy gives rise to confidence : Imagine having to make a life-changing financial decision without all the necessary information. With knowledge about finances, individuals can approach major life choices with greater confidence. They'll be more likely to achieve the outcome they desire and less likely to be surprised or negatively impacted by unforeseen outcomes.

Strategies to Improve Financial Literacy Skills

Developing financial literacy involves learning and practicing skills related to budgeting, managing, and paying off debts , and more. It means understanding and using credit and investment products wisely. The good news is that, no matter where you are in life and financially, it’s never too late to start practicing good financial habits.

Here are several practical strategies to consider.

Create a Budget

Track how much money you receive each month and how much you spend. You can use an Excel spreadsheet, paper, or a budgeting app . Your budget should include income (paychecks, investments, alimony), fixed expenses (rent/mortgage payments, utilities, loan payments), discretionary spending (nonessentials such as eating out, shopping, and travel), and savings.

Pay Yourself First

To build savings, this reverse budgeting strategy involves choosing a savings goal, such as paying for higher education, deciding how much you want to contribute toward it each month, and setting that amount aside before you divvy up the rest of your expenses.

Pay Bills Promptly

Stay on top of monthly bills, making sure that your payments are always sent to arrive on time. Consider taking advantage of automatic debits from a checking account or bill-pay apps, and sign up for payment reminders (by email, phone, or text).

Get Your Credit Report

Once a year, consumers can request a free credit report from each of the three major credit bureaus —Equifax, Experian, and TransUnion—through the federally created website AnnualCreditReport.com.

Review these reports and dispute any errors by informing the credit bureau of inaccuracies. Because you can get three of them, consider spacing out your requests throughout the year to monitor your credit regularly.

In a 2022 survey by the Federal Reserve, 27% of adults in the U.S. reported not "doing okay" financially. The number who reported not living comfortably increased from 2021.

Check Your Credit Score

A good credit score enables you to obtain the best interest rates on loans and credit cards, among other benefits. Monitor your score via a free credit monitoring service. Or, if you can afford to and want to add an extra layer of protection for your personal information, use a credit monitoring service . In addition, be aware of what can raise or lower your scores, such as credit inquiries and credit utilization ratios.

Manage Debt

Use your budget to stay on top of debt by reducing spending and increasing repayment. Develop a debt reduction plan , such as paying down the loan with the highest interest rate first. If your debt is excessive, contact lenders to renegotiate repayment, consolidate loans , or find a debt counseling program.

Invest in Your Future

If your employer offers a 401(k) retirement savings account, be sure to sign up and contribute the maximum to receive the employer match . Consider opening an IRA and creating a diversified investment portfolio of stocks, fixed income, and commodities. If necessary, seek financial advice from professional advisors to help you determine how much money you will need to retire comfortably and develop strategies to reach your goal.

Example of Financial Literacy

Emma is a high school teacher who tries to inform her students about financial literacy through her curriculum. She educates them on the basics of a variety of financial topics, such as personal budgeting, debt management, saving for college and retirement, insurance, investing, and even tax planning. Emma’s students can and will use these concepts for things like renting an apartment, getting a first job, or even just paying for fun activities such as going to the movies.

Understanding concepts such as credit cards, bank accounts, interest rates, opportunity costs, debt management , compound interest, and budgets, for example, could help her students start saving and manage the student loans that they might rely on to fund their college education. It could keep them from amassing dangerous levels of debt and threatening their credit scores.

Similarly, she expects that certain topics, such as income taxes and retirement planning, will eventually prove useful to all students, no matter what they end up doing after high school.

Why Is Financial Literacy Important?

Financial literacy gives an individual the tools and resources they need to be financially secure throughout their life. The lack of financial literacy can lead to many pitfalls, such as overspending and accumulating unsustainable debt burdens. This, in turn, can lead to poor credit, bankruptcy, housing foreclosure, or other negative consequences.

How Do I Become Financially Literate?

Becoming financially literate involves learning and practicing a variety of skills related to budgeting, managing and paying off debts, and understanding credit and investment products. Basic steps to improve your personal finances include creating a budget, keeping track of expenses, making timely payments, being prudent about saving money, periodically checking your credit report, and investing for your future.

What Are Some Popular Personal Budget Rules?

Two commonly used personal budgeting methods are the 50/20/30 and 70/20/10 rules, and their simplicity is what makes them popular. The first entails dividing your after-tax, take-home pay into three areas: needs (50%), savings (20%), and wants (30%). The 70/20/10 rule also follows a similar blueprint, recommending that your after-tax, take-home income be divided into segments that cater to expenses (70%), savings or reducing debt (20%), and investments and charitable donations (10%).

What Are the Principles of Financial Literacy?

There are five broad principles of financial literacy. Though other models may list different key components, the overarching goal of financial literacy is to teach individuals about earning, spending, saving, borrowing, and protecting their money.

Financial literacy is the knowledge of various aspects of personal finance and the ability to make smart decisions about money.

It includes preparing a budget, knowing how much to save, recognizing favorable loan terms, understanding what impacts credit, and distinguishing different investment options that can be used to save for retirement.

The financial skills that come from financial literacy can help individuals handle their personal finances responsibly which, in turn, can help them protect the well-being of their financial futures.

Federal Reserve Bank of San Francisco. “ 2022 Findings from the Diary of Consumer Payment Choice .” Page 6.

U.S. Department of the Treasury. “ Financial Literacy and Education Commission .”

Board of Governors of the Federal Reserve System. “ Economic Well-Being of U.S. Households in 2022 .” Pages 68, 71.

Bolognesi, Andrea and et al. “ Millennials and Money: Financial Preparedness and Money Management Practices Before COVID-19 .” TIAA Institute Research Dialogue , no. 167, August 2020, pp. 5, 6, 15, 22.

Bolognesi, Andrea and et al. “ Millennials and Money: Financial Preparedness and Money Management Practices Before COVID-19 .” TIAA Institute Research Dialogue , no. 167, August 2020, pp. 13.

Federal Trade Commission. " Free Credit Reports ."

Board of Governors of the Federal Reserve System. “ Economic Well-Being of U.S. Households in 2022 .” Page 5.

MyMoney.gov. " My Money Five ."

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Essay on Bank

Banks are financial institutions that deal in monetary transactions. Banks form an integral part of any society. There are numerous banks located in different parts of our country. While earlier there were limited number of banks with a few branches in big cities and towns in India, a number of new banks have opened in the last few decades with branches in every nook and corner of the country. Banks provide a lot of services based on the customer’s requirements. They provide locker facilities, safe deposits, ATM Services, Fixed Deposits, money transfer, loan for business and houses and several other monetary services to their customers.

Long and Short Essay on Bank in English

Here are essay on Bank in English of varied lengths to help you with the topic whenever you required.

After going through these Bank essay, your knowledge about banks, their functioning and their usefulness will enhance and you will emerge as a knowledgeable person.

These essays will prove useful in your school or college assignments, especially for students of commerce or banking.

You can select any bank essay of your choice given below:

Bank Essay 1 (200 words)

The banking system that involves accepting deposits and lending money initiated centuries back in various parts of the world. The system improvised over the time and the banks these days offer various other facilities in addition to the basic depositing and lending of money.

People are encouraged to keep their money in the banks because it is a safe and secure way to store the money. The money stored in the bank in the form of fixed deposits and recurring deposits also fetches a good amount of interest. In addition to money, one can also keep jewellery and important papers in the bank lockers.

Providing loans, which is another primary function of the banks, is also beneficial for individuals and businesses in many ways. Salaried people can build their assets such as property, car, etc easily with the help of loans from the bank. Businessmen can expand their businesses with this facility. A number of other services are also provided to the businessmen to ease their financial transactions and aid in the growth of their business.

Online Banking has further enhanced the process of banking. Various banking services such as checking balance, transferring amount, applying for loan are now provided on the bank’s website. All the customers require doing is opting for internet banking service.

Bank Essay 2 (300 words)

Introduction

Banking system has been in place since centuries. The system has been prevalent in India as well as other parts of the world. Only the services provided and the functions carried out have enhanced over the time.

History of Banks

Banking service began back in the 14 th century in some parts of Renaissance Italy. It was initiated on the lines of the concept of lending and borrowing that took place among people since the ancient era. In the ancient times, the merchants gave grain loans to the traders and farmers. This was called the barter system. Over the time the system evolved to accepting deposits and lending money.

The Fuggers, the Medicis, the Berenbergs, the Rothschilds are among some of the banking dynasties that are known to play a central role in the history of banking. They dominated this sector for centuries. Modern banking services such as issuance of banknotes and reserve banking started in the 17 th century. Bank of England and The Royal Bank of Scotland are some of the oldest banks in the world.

History of Banks in India

In India, the banking system dates back to the Vedic civilization. Loans were given to the needy in that era too only the nitty-gritty’s involved in the same were different. Loans deeds in that period were known by the name rnalekhya or rnapatra.

Big businessmen and landlords gave money to the small traders and farmers on interest in the earlier times. This culture is still prevalent in some villages in the country. The lands or other valuable assets of those who were unable to pay the amount were confiscated just as the banks do these days.

The first bank established in India was the Bank of Hindustan. It was opened in the year 1770 in Calcutta. Bank of Bombay, Bank of Calcutta and Bank of Madras were set up later in the early 19 th century.

There are numerous types of banks in every country to cater to the needs of different customers. They provide various services and aid in the growth of the country’s economy.

Bank Essay 3 (400 words)

A bank is an institution that accepts money deposits from the public and provides funds on credit to individuals as well as firms. These are the primary functions of a bank but not the only functions. They provide various other services to its customers such as locker facility, transfer of funds, issuance of drafts and portfolio management to name a few.

Importance of Banks

Banks are important for the individuals as well as the development of the country’s economy. Here is why these institutions are of importance:

Provides Safety and Security

Money kept at home is not safe. It is prone to burglary. When you keep your money in the bank, it is the bank’s responsibility to safeguard it. You do not have to worry about its security.

Encourages Saving Habits

Banks offer various schemes from time to time to encourage saving habits in people. The money put in the bank is not only saved but also grows. You have the option of withdrawing it any time you want.

Eases Trade and Commerce

Banks promote trade within the country by providing loans and advances to the traders. It also eases the process of trading between different countries. They provide easy money transaction options to smoothen the process. It is easy to send and receive funds from anywhere with the advancement in the banking system.

Promotes Agricultural Sector

Agricultural sector is an important part of the economy. There are special banks that provide loans to the farmers at low interest to promote agricultural activities. Banks thus aid in promoting the agricultural sector.

Aids in Development of Industries

Banks accept deposits from individuals and businesses and provide loads to the industries. They thus aid in the development of various industries in this way. The loan can be repaid in easy instalments.

Provides Employment Opportunities

Banks provide loans for the growth and development of the agricultural and industrial sectors. As these sectors expand, a number of employment opportunities are created for the public.

Banks are an important part of any country. The modern banking services have helped in easing the process of trade, development of industries and other activities that help in the development of the country’s economy. Banks and other financial institutions that promote the growth of businesses and safeguard the money and other valuable assets of individuals are certainly play an integral role in the development of a country’s economy.

Bank Essay 4 (500 words)

Banks play an important role in maintaining financial stability in the country. They offer numerous services to help you manage your finances better. These institutions thus form a vital part of any society.

Functions of Banks

The functions of banks have broadly been classified into two categories. These are the primary functions and the secondary functions. Here is a look at these in detail:

Primary Functions

Primary functions are the main functions of the banks. These include accepting deposits and providing loans. Here is a brief look at these functions:

Accepting Deposits

These deposits are basically of four different types:

Saving Deposits: These deposits encourage public to save money. The money can easily be withdrawn and deposited in the saving account without much restriction. The interest rate here is however quite low.

Current Deposits: This account is especially for the businessmen. These accounts offer facilities such as overdraft that are beneficial for the businesses. No interest is paid in this account.

Fixed Deposits: In a fixed deposit a considerable big amount is deposited in the account for a fixed period of time. The rate of interest is high in such deposits.

Recurring Deposits: A certain amount is deposited at regular intervals in such an account. The rate of interest is high. However, the amount cannot be withdrawn before a certain period.

Providing Loans

Here are the types of loans and advances offered by the banks:

Loans: Loans are offered for both short term and long term period. The rate of interest charged on the same varies based on the type and duration of loan. It can be repaid in instalments.

Cash Credits: The customers have the facility to take cash credit up to a certain amount which is fixed in advanced. A separate cash credit account needs to be maintained for this.

Overdraft: This facility is for businessmen. It is thus provided to the current account holders. They do not require maintaining a separate account to avail this facility.

Secondary Functions

Secondary functions, also known as non-banking functions, are of two types. These are agency functions and general utility functions. Here is a brief look at both these types of functions:

Agency Functions

The bank also acts as an agent for its customers. A number of agency functions are performed by this institution. These include collection of cheques, periodic payments, portfolio management, periodic collections and transfer of funds. Banks also act as executors, administrators, advisors and trustees for their customers. They help their customers deal with other institutions.

General Utility Functions

Banks also perform general utility functions that include providing locker facility, underwriting of shares, dealing in foreign exchange, issuance of drafts and letter of credits, drafting project reports, undertaking social welfare programmes such as public welfare campaigns and adult literacy programmes.

Discounting of bill of exchange is another service provided under this.

While initially the functions of banks only included accepting deposits and providing loans; they have started providing various other services now. All these facilities are aimed at helping the customers with their finances.

Bank Essay 5 (600 words)

Banks are financial institutions that lend money and accept deposits from general public. Banks maintain the flow of money in the country and are important for its economic growth. There are different types of banks that offer different kinds of services to individuals as well as businesses.

Types of Banks

Here are the various types of banks and their functions:

National Banks

Also known by the name, Central or Federal bank, these banks manage the financial system of the government. These non-profit making institutes serve as bankers to the other banks. There is one Central bank in every country. Some of the functions of National banks include supervising foreign exchange, controlling the country’s currency and issuance of paper currency. They do not deal with the general public.

Retail Banks

These are the most common types of banks. These are mainly set up to focus on the requirements of the general public. They open your savings account, provide credit cards, give loans and provide locker facility among other services.

Saving Banks

These are especially established to inculcate the habit of saving money among the people. The deposits from the customers are turned into securities and bonds in these banks. These were set up way back in the 18 th century in European countries. Besides, accepting deposits from individuals these banks offer various other services too.

Commercial Banks

The main aim of these banks is to aid the business class. They provide loans to the businessmen and also provide other services that are useful for the business men. Some of these services include bill of exchange, overdraft and cheque collection.

Investment Banks

These banks are also set up to aid the businesses. These banks help the businessmen establish a foothold in the financial markets. Investment banks facilitate those businessmen who require selling debt to the investors or want to go public with their business.

Land Mortgage Banks

Also known as agricultural banks or Land Development banks, these are mainly set up to aid the agricultural sector by financing it. These banks also play an important part in land development. The reason why this special category of banks has come into being is that there is a lot of risk in financing the agricultural sector and the commercial banks that support other businesses are not ready to take such risk.

Co-operative Banks

Co-operative banks provide loans to small-scale farmers, small-scale businesses and salaried people. They provide both commercial and retail services to people. These banks are registered under Co-operative Societies Act, 1912.

Consumer Banks

These banks have exclusively been set up to provide loan for purchasing durable consumer goods such as car, washing machine, refrigerator, furniture, etc. These banks give their consumers the leverage to repay loans in easy instalments. These are mostly found in first world countries.

Industrial Banks

Also known by the name Development Banks, these banks are established to aid the industrial sector. These banks accept cash by issuing shares and debentures. They provide long-term loan to the industries to help them expand and develop. Many such banks have been established in the country post independence.

Exchange Banks

These banks are particularly engaged in financing foreign trade. Some of the main functions of these banks include discounting foreign bills, purchasing and selling silver and gold and providing assistance in carrying out export and import trade.

Banks are established to ease the financial issues of the general public as well as the country as a whole. Different types of banks serve different purposes and have been set up to cater to the needs of various classes.

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Essay on Bank in English for Children and Students

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Long and Short Essay on Bank in English

Here are essay on Bank in English of varied lengths to help you with the topic whenever you required.

After going through these Bank essay, your knowledge about banks, their functioning and their usefulness will enhance and you will emerge as a knowledgeable person.

These essays will prove useful in your school or college assignments, especially for students of commerce or banking.

You can select any bank essay of your choice given below:

Bank Essay 1 (200 words)

Bank Essay 2 (300 words)

Introduction

History of Banks

History of Banks in India

There are numerous types of banks in every country to cater to the needs of different customers. They provide various services and aid in the growth of the country’s economy.

Bank Essay 3 (400 words)

Importance of Banks

Banks are important for the individuals as well as the development of the country’s economy. Here is why these institutions are of importance:

Provides Safety and Security

Money kept at home is not safe. It is prone to burglary. When you keep your money in the bank, it is the bank’s responsibility to safeguard it. You do not have to worry about its security.

Encourages Saving Habits

Eases Trade and Commerce

Promotes Agricultural Sector

Aids in Development of Industries

Provides Employment Opportunities

Banks provide loans for the growth and development of the agricultural and industrial sectors. As these sectors expand, a number of employment opportunities are created for the public.

Bank Essay 4 (500 words)

Functions of Banks

The functions of banks have broadly been classified into two categories. These are the primary functions and the secondary functions. Here is a look at these in detail:

Primary Functions

Primary functions are the main functions of the banks. These include accepting deposits and providing loans. Here is a brief look at these functions:

Accepting Deposits

These deposits are basically of four different types:

Current Deposits: This account is especially for the businessmen. These accounts offer facilities such as overdraft that are beneficial for the businesses. No interest is paid in this account.

Fixed Deposits: In a fixed deposit a considerable big amount is deposited in the account for a fixed period of time. The rate of interest is high in such deposits.

Recurring Deposits: A certain amount is deposited at regular intervals in such an account. The rate of interest is high. However, the amount cannot be withdrawn before a certain period.

Providing Loans

Here are the types of loans and advances offered by the banks:

Loans: Loans are offered for both short term and long term period. The rate of interest charged on the same varies based on the type and duration of loan. It can be repaid in instalments.

Cash Credits: The customers have the facility to take cash credit up to a certain amount which is fixed in advanced. A separate cash credit account needs to be maintained for this.

Overdraft: This facility is for businessmen. It is thus provided to the current account holders. They do not require maintaining a separate account to avail this facility.

Secondary Functions

Secondary functions, also known as non-banking functions, are of two types. These are agency functions and general utility functions. Here is a brief look at both these types of functions:

Agency Functions

General Utility Functions

Discounting of bill of exchange is another service provided under this.

Bank Essay 5 (600 words)

Types of Banks

Here are the various types of banks and their functions:

National Banks

Retail Banks

Saving Banks

Commercial Banks

Investment Banks

Land Mortgage Banks

Co-operative Banks

Consumer Banks

Industrial Banks

Exchange Banks

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107 Banking Essay Topic Ideas & Examples

Inside This Article

Banking is a fundamental aspect of the modern economy, serving as the backbone of financial systems worldwide. As a result, there is a vast array of topics to explore within the field of banking. Whether you are a student looking for inspiration or a banking professional seeking to expand your knowledge, this article presents 107 essay topic ideas and examples to help you get started.

The impact of digital banking on traditional banking services.
The role of central banks in regulating the economy.
The benefits and drawbacks of using mobile banking applications.
The future of cryptocurrencies and their impact on traditional banking systems.
The role of commercial banks in fostering economic growth.
The impact of interest rates on consumer borrowing behavior.
The ethical implications of banks investing in controversial industries.
The challenges faced by small and medium-sized banks in an era of consolidation.
The impact of globalization on the banking industry.
The role of banks in promoting financial inclusion.
The impact of technology on fraud prevention in banking.
The effectiveness of stress tests in assessing bank resilience.
The role of banks in financing infrastructure projects.
The impact of banking regulations on lending practices.
The benefits and challenges of open banking.
The role of banks in supporting entrepreneurship and innovation.
The impact of fintech startups on traditional banking institutions.
The role of banks in addressing income inequality.
The impact of banking crises on economic stability.
The future of branch banking in a digital world.
The role of banks in facilitating international trade.
The impact of artificial intelligence on banking operations.
The challenges and opportunities of sustainable banking practices.
The role of banks in promoting financial literacy.
The impact of bank mergers and acquisitions on customers.
The challenges of implementing anti-money laundering regulations in the banking sector.
The role of banks in supporting the United Nations Sustainable Development Goals.
The impact of financial technology on banking job opportunities.
The challenges of managing cybersecurity risks in the banking industry.
The role of banks in financing renewable energy projects.
The impact of demographic changes on banking services.
The challenges of implementing digital identity verification in banking.
The role of banks in facilitating financial intermediation.
The impact of economic sanctions on banking operations.
The challenges of implementing Basel III regulations in emerging markets.
The role of banks in supporting the growth of small and medium-sized enterprises.
The impact of consumer behavior on retail banking strategies.
The challenges of implementing real-time payments in the banking sector.
The role of banks in promoting financial stability.
The impact of banking regulations on the cost of credit.
The challenges of implementing sustainable finance practices in the banking industry.
The role of banks in supporting affordable housing initiatives.
The impact of banking innovations on financial inclusion in developing countries.
The challenges of implementing instant payments in cross-border transactions.
The role of banks in addressing climate change risks.
The impact of online banking on branch closures.
The challenges of implementing data protection regulations in the banking sector.
The role of banks in financing education and healthcare.
The impact of banking regulations on the profitability of small banks.
The challenges of implementing real-time fraud detection in banking.
The role of banks in promoting gender equality in access to finance.
The impact of customer trust on banking relationships.
The challenges of implementing blockchain technology in the banking industry.
The role of banks in supporting disaster recovery efforts.
The impact of banking regulations on cross-border capital flows.
The challenges of implementing biometric authentication in banking services.
The role of banks in supporting financial resilience.
The impact of banking innovations on customer loyalty.
The challenges of implementing sustainable supply chain finance in the banking sector.
The role of banks in promoting responsible lending practices.
The impact of banking regulations on financial innovation.
The challenges of implementing real-time liquidity management in banking.
The role of banks in supporting cultural and creative industries.
The impact of banking crises on bank lending behavior.
The challenges of implementing instant payments in the gig economy.
The role of banks in promoting social impact investing.
The impact of banking regulations on bank profitability.
The challenges of implementing artificial intelligence in customer service in banking.
The role of banks in supporting financial education in schools.
The impact of banking innovations on financial risk management.
The challenges of implementing sustainable procurement practices in the banking sector.
The role of banks in promoting responsible investment.
The impact of banking regulations on financial stability in emerging markets.
The challenges of implementing real-time customer onboarding in banking.
The role of banks in supporting cultural heritage preservation.
The impact of banking crises on bank lending to small businesses.
The challenges of implementing instant payments in government transactions.
The role of banks in supporting impact entrepreneurship.
The impact of banking regulations on cross-border banking activities.
The challenges of implementing artificial intelligence in credit risk assessment in banking.
The role of banks in promoting financial literacy among vulnerable populations.
The impact of banking innovations on financial crime prevention.
The challenges of implementing sustainable insurance products in the banking sector.
The role of banks in supporting sustainable agriculture and food security.
The impact of banking regulations on financial inclusion in rural areas.
The challenges of implementing real-time transaction monitoring in banking.
The role of banks in promoting responsible corporate governance.
The impact of banking crises on bank lending to households.
The challenges of implementing instant payments in the healthcare sector.
The role of banks in supporting social entrepreneurship.
The impact of banking regulations on cross-border payment systems.
The challenges of implementing artificial intelligence in anti-money laundering in banking.
The role of banks in promoting financial literacy among young people.
The impact of banking innovations on sustainable finance.
The challenges of implementing sustainable supply chain finance in global banking networks.
The role of banks in supporting renewable energy investments.
The impact of banking regulations on financial stability in post-conflict countries.
The challenges of implementing real-time fraud prevention in mobile banking.
The role of banks in promoting responsible investment in emerging markets.
The impact of banking crises on bank lending to the real estate sector.
The challenges of implementing instant payments in the education sector.
The role of banks in supporting social impact bonds.
The impact of banking regulations on cross-border remittances.
The challenges of implementing artificial intelligence in customer relationship management in banking.
The role of banks in promoting financial literacy among senior citizens.
The impact of banking innovations on sustainable development finance.
The challenges of implementing sustainable supply chain finance in the global fashion industry.

These essay topic ideas provide a comprehensive overview of the vast array of issues within the field of banking. Whether you choose to explore the impact of digital banking, the role of banks in promoting sustainability, or the challenges of implementing new technologies, there are countless avenues for research and analysis. By selecting a topic that piques your interest, you can delve deeper into the complexities of the banking industry and contribute to the ongoing development of this crucial sector.

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Home » Bank Exams » Descriptive Writing For Bank Exams

Descriptive Writing For Bank Exams: A Complete Guide

Descriptive Writing

Descriptive Writing For Bank Exams : In almost every banking related exam, the mains exam consist of descriptive writing. Descriptive Writing which comprises – one Letter Writing and one Essay Writing which makes a total of 25 marks in most of the exams such as NABARD, RBI, IBPS PO, SBI PO etc. The marks that you get in the descriptive writing section are added to the Mains objective paper marks to calculate the overall mains cut-off marks . So, it is very important to have a good idea about Descriptive writing.

In this blog, Descriptive Writing For Bank Exams we will provide you with some of the important topics, types, and formats for Letter writing. Do remember that in the exam, you will have to type the Essay and Letter using the computer keyboard. So it is advisable to practice them online.

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Descriptive English For Bank Exams – Types of Letter Writing

There are mainly two types of letters asked in exams:

FORMAL LETTER

INFORMAL LETTER

Written in official and non-personal capacity.
Written to authorities, dignitaries, bureaucratic bodies, news editors, bank managers, etc
Personal Letter
Written to personal contacts, family, friends, relatives, siblings, etc

How to Write a Letter in English – A Guide | Oliveboard

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Descriptive Writing For Bank Exams – Topics For Letter Writing

Below are some important and latest topics that you can practice writing upon for your different Bank Exam descriptive writing part.

Formal Letter Topics-

Write a letter to the branch manager of your bank to conduct a campaign in your area to create awareness about the benefits of KYC.
Write a letter to the Superintendent of Police of your district suggesting steps to make the police department more approachable.
Write a letter to the editor of a local newspaper detailing the losses suffered by local retailers during online sales during festivals.
Write a letter to the editor of a local newspaper about the stray animal problem getting out of hand in your locality.
Complaint letter about hassle faced by common people due to demonetization.
Complaint letter about increasing noise pollution.
Complaint letter concerning the chaotic state of traffic.
Letter to Bank Manager to reissue your ATM Card.
Letter expressing your views on corruption in this country.
Request letter for greater frequency of Public Transport (Bus Service) in your area.

Informal letters topics-

Letter to your younger sibling, stating the importance of a healthy diet and the reasons for avoiding junk food.
Write a letter to your younger sibling, who has recently started working, to not take too much stress at work.
Write a letter to your younger sibling about the recent changes in traffic rules and fines, advising him/her to be cautious
Letter to your favorite novelist about his/her recent novel.
Letter to your sister congratulating her on her promotion.
Letter to your friend who is depressed.
Letter to your parents advising them to invest in mutual funds.
Letter to invite your friend to your brother’s wedding.
Letter to convince your friend to take better care of her health .

Prepare these topics or any similar topic that attracts your attention and you will be good to go.

Descriptive Writing For Bank Exams – Common Tips On Letter Writing

Word limit – 150 words.
Correct format and salutation (different for both).
Take care of grammar, spelling, punctuation, and indentation.
Every part carries equal weightage.
3 paragraphs – an introductory paragraph, a body, and a concluding paragraph.
Try not to go beyond a single paragraph for the body.
A letter must never be written in points.
Use simple and straightforward sentences.
The letter should have a flow, clearly mentioning the purpose of writing.
Do not use jargon, slang, or abbreviations.

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Descriptive Writing For Bank Exams – Formal Letter Format

Use a comma after every line of address.
Salutation should be “Dear Ma’am/ Sir”.
Subject can be placed AFTER or BEFORE salutation.
Addresses of both sender and receiver must be mentioned in a formal letter.
Sender address> Receiver address > Salutation.
The introduction must mention the issue.
The body should describe the issue.
The conclusion must quote the steps that can be taken/ expectations/ timelines, etc.
The statements must be very direct and written in a formal command and sentence structure. Use active voice preferably.

Practice Letter writing Here

Descriptive Writing For Bank Exams – Informal Letter Format

Address of only the sender should be mentioned in an informal letter.
Use comma after every line of address.
Salutation should be “Dear name of the friend/ family”.
The introduction should have greetings and mention the reason for writing the letter.
The body should give descriptions of the same.
The conclusions must end with well wishes, etc.
Be polite and do not form long sentences and be extra careful of the word limit.

Tips for letter writing:

Candidates must be able to identify the type of letter they will write. Eg, writing a letter to the Principal asking for leave is a formal letter, but writing a letter to the Principal to catch up after a long time would be an informal letter.
In formal letters, clearing the purpose of the letter immediately is very important.
Polite words and civil language should be used while writing a letter.
The letter should be precise and to the point.
The opening and closing format should be correct. re

Complete Descriptive Writing Guide Here

You can also download the E-book for descriptive writing.

Sneak-Peek into the E-Book – Descriptive Writing

How are letters and essays evaluated?

Although there is no set criteria according to which the descriptive section paper is evaluated, there are some common things that are examined by the evaluator. For most banking exams, the descriptive section is evaluated manually.

Content: The examiner would see whether aspects of the topic have been addressed in the essay and if provided details, examples and explanations are appropriately supporting the candidate’s point of view.

Descriptive writing Guide is Here! Read More

Formal Requirement: As the paper is descriptive in nature there are certain requirements that must be fulfilled by the answers. For letters, the format must be strictly adhered to. Although extra marks might not be awarded for the format/ structure, an absence of it might cause a reduction in your marks. For letter writing, stick to the prescribed formats of formal and informal letters. For essays, make sure the word limit (if any) is not exceeded. Also, make sure that the essay is in paragraph form.

Development, Structure and Coherence: How well the topic has been understood and explained is the main criteria for evaluating any piece of descriptive writing. The examiner sees whether there are any examples given, what is the range of thoughts/ ideas presented and how logically they are penned down. The following might be the few things an examiner is looking for in your piece of writing:-

Does each paragraph contain just one idea or concept?
Does the evidence support the writer’s argument?
Does this paper have a beginning (introduction), a middle (body), and an end (conclusion)?

Grammar: This is also a very important criterion. An essay may be logically presented, it may have a variety of ideas, but if the grammar is bad, it makes the entire essay ‘not so good’. Examiners don’t expect complex sentences. Just make sure you create correct and straightforward sentence structures and convey your thoughts effectively.

Does this paper have proper punctuation?
Does the author provide complete sentences?
Does this paper have consistent verb tense, voice, and third-person usage? (essays are generally written in the third person)

Vocabulary & Spelling: Again we would like to clarify that a test taker is not expected to use “high – fi” English words. As long as you have the right word for an idea, that’s good. A simple example of this would be:

If you want to say “very good”, say “excellent”.

Also, avoid spelling mistakes as they point to a careless attitude.

Here, we would like to mention one important thing: Time Management. Make sure you divide your time as per the weightage of the question. Since an essay has higher marks, allot more time to it.

Descriptive English Practice 04 – Letter-Writing Samples by Oliveboard Users

Refer to the expert guidance for Descriptive Writing in the below-given video.

How To Write an Essay and Important Topics For Essay Writing : Find Here

This is all from us in our blog for Descriptive Writing For Bank Exams. For more updates related to the Banking Exam, Please stay tuned to Oliveboard.

English Letter Writing Format: Tips and Tricks | Oliveboard

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Banking In India Essay | Essay on Banking In India for Students and Children in English

February 14, 2024 by Prasanna

Banking In India Essay: A bank is a financial body that accepts deposits and channels them into lending through loans or capital markets. Banks thus, connect customers with lack of funds 1 and those with extra capital.

“Money plays the largest part in determining the course of history.” -Karl Marx

You can read more Essay Writing about articles, events, people, sports, technology many more.

Long and Short Essays on Banking In India for Kids and Students in English

Given below are two essays in English for students and children about the topic of ‘Banking In India’ in both long and short form. The first essay is a long essay on Banking In India of 400-500 words. This long essay about Banking In India is suitable for students of class 7, 8, 9 and 10, and also for competitive exam aspirants. The second essay is a short essay on Banking In India of 150-200 words. These are suitable for students and children in class 6 and below.

Long Essay on Banking In India 500 Words in English

Below we have given a long essay on Banking In India of 500 words is helpful for classes 7, 8, 9 and 10 and Competitive Exam Aspirants. This long essay on the topic is suitable for students of class 7 to class 10, and also for competitive exam aspirants.

The word ‘bank’ was borrowed from European languages, literally meaning ‘bench’ or ‘counter’. Banking system evolved in the 14 th century in Italy. By the 18 th century, merchants of London had started storing their gold with goldsmiths who charged a fee and issued receipts. A banker is a person who discharges his duties in the form of operating customer accounts and, paying and collecting cheques.

Banks borrow money by accepting the l money deposited in current accounts, by accepting term deposits and issuing securities on banknotes and bonds. They also create pew capital by giving loans. Banking activities can be for retail, in which the customers and small businesses are involved directly with the bank; for businesses for large corporate houses and for investments.

There are various types of banks such as commercial banks (which are engaged solely in banking activities), investment banks (for capital market activities), cooperative banks (non-profit banks), postal savings banks (associated with postal systems) and private banks (managing the assets of high net worth people).

In India, banking has its origin in the Vedic period. It is believed that the transition from money lending to banking must have occurred even before Manu, the great Hindu Jurist, who laid down rules relating to rates of interest. During the Mughal period, the indigenous bankers played a very important role in lending money and. financing foreign trade and commerce.

The first bank in India, though elemental, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are Early Phase from 1786 to 1969 of commercial banks; Nationalisation of Commercial Banks upto 1991, prior to Indian banking sector reforms and New Phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reforms after 1991.

The General Bank of India was set-up in the year 1786. The East India Company established the Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks, for mostly European shareholders. For the first time exclusively by Indians, Punjab National Bank Ltd was set-up in 1894 with Headquarters at Lahore. During the first phase, the growth was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small.

To streamline the functioning and activities of commercial banks, the Government of India came up with the Banking Companies Act, 1949 which was later changed to Banking Regulation Act, 1949 as per amendment Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority. RBI is the Central Bank of the country since 1935. It regulates and controls credit, issues licenses and functions as the banker of all banks and the government.

During those days, public had lesser confidence in banks. As an aftermath, the deposit mobilisation was slow. Instead of banks, the savings bank facility provided by the Postal department was considered comparatively safer. Moreover, funds were largely given to traders. Government took major steps in the Indian Banking Sector Reforms after Independence. In 1955, it nationalised Imperial Bank of India with extensive banking facilities on a large scale, especially in rural and semi-urban areas. It formed the State Bank of India, to act as the principal agent of RBI and to handle banking transactions of the Union and State Governments all over the country.

It was on the efforts of the then Prime Minister of India, Mrs Indira Gandhi that 14 major commercial banks in the country were nationalised in 1960’s. The second phase of nationalisation, with Indian Banking Sector Reforms, was carried out in 1980 with the nationalisation of seven more banks. This step brought 80% of the banking segment in India under government ownership. After the nationalisation of banks, the branches of the public sector banks in India rose to approximately 800% in deposits and advances took a huge jump by 11000%.

Banking in the support of government ownership, gave the public implicit faith and immense confidence about the sustainability of these institutions. The third phase has introduced many more products and facilities in the banking sector in its reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was set-up to suggest measures for banking sector reforms. Today, the country is flooded with foreign banks and their ATM stations. Efforts are being put in to give a satisfactory service to customers. Phone banking and net banking have been introduced. The entire system has become more convenient and swift. Time is given more importance than money. The financial system of India has shown a great deal of resilience. It is sheltered from any crisis triggered by external macroeconomics shock, unlike other East Asian Countries that had to suffer. This is largely due to flexible exchange rate regime, high foreign exchange reserves and reforms in the capital markets and banks. Presently, in India, the banking sector is segregated as public or private sector banks, cooperative banks and regional rural banks. Bouquet of services are available at the customer’s demand in today’s banking system. Different types of accounts and loans, have been facilitated with the advent of plastic money and money transfer across the globe. The last decade experienced a complete change in the financial and banking sector. The capital and financial markets, banking and non-banking institutions and financial instruments were redressed towards development.

Short Essay on Banking In India 350 Words in English

Below we have given a short essay on Banking In India is for Classes 1, 2, 3, 4, 5, and 6. This short essay on the topic is suitable for students of class 6 and below.

Industrial Development Bank of India (IDBI) is the tenth largest bank in the world in terms of development. With the advancement of technology, banking sector has become easier, faster, accurate and also timesaving. ATMs, Mobile Banking, SMS Banking and Net Banking are only the tips of an iceberg.

The enhanced role of the banking sector in the Indian economy, the increasing levels of deregulation along with the ascending levels of competition have facilitated globalisation of the Indian banking system and placed numerous demands on banks. Operating in this demanding environment has exposed them to various challenges. The last decade has witnessed major changes in the financial sector new banks, new financial institutions, new instruments, new windows, and new opportunities and along with all this, new challenges.

While deregulation has opened up new vistas for banks to augment revenues, it has entailed greater competition and consequently greater risks. Demand for new products, particularly derivatives, requires banks to diversify their product mix and also affect rapid changes in their processes and operations in order to remain competitive in the globalised environment.

Developing countries like India have a huge population. Banking must reach out to people even in the remote fragmented locations. Banks are also suffering from diminishing employee satisfaction. Losing out on potential and valuable customer base would be one of the consequences. Top level executives and human resource departments of various banks need to spend time and effort towards retention of their key employees. Banks have also come under the scanner recently, due to various scams and malpractices. The arrest of the Chairman of Syndicate Bank is the latest case in sight.

The banking sector also introduced the All-Women’s Bank, known as Bhartiya Mahila Bank, in New Delhi. It was inaugurated by the then PM Manmohan Singh on 19 th November, 2013, to commemorate the 94 th birthday of Indira Gandhi. India will be the third nation after Pakistan and Tanzaniya, to have a bank dedicated to women. The bank will offer concession on loan rates to women. It would also motivate people interested in entrepreneurship to locally train women in vocational skills. The other goal is to promote ownership of assets among women customers, as assets serve as a back-up in cases of domestic violence.

However, the present governor of RBI, Raghuram Rajan has assured that this case shouldn’t be extrapolated to the entire system. Banks shouldn’t be just money-lending institutions, they should be ‘banks with a conscience’.

Banking In India Essay Word Meanings for Simple Understanding

channel – a course into which something may be directed
Retail – the sale of goods to ultimate consumers, usually in small quantities
Indigenous – originating in and characteristic of a particular region or country
Segregated – to separate or set apart from others or from the main body or group
Distinct – different in nature or quality, dissimilar
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Essay on the Role of Banks in Economic Development

The role of banks in economic development is to remove the deficiency of capital by stimulating savings and investment.

A sound banking system mobilizes the small and scattered savings of the community, and makes them available for investment in productive enterprises.

In any plan of economic development, capital occupies a position of strategic importance. No economic development of sizable magnitude is possible unless there is an adequate degree of capital formation. A very important characteristic of an under-developed economy is deficiency of capital which is the result of insufficient savings made by the community. Backward economies hardly save 5% of the national income, whereas they should save and invest at least 15%.

In 1950, Colin Clark, estimating the capital needs of China, India and Pakistan, pointed out that they must save 12.5% of the national income to absorb the increasing labour force and maintain the past rate of increase in productivity.

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In the under-developed countries, not only is the capital stock extremely small but, as pointed out above, the current rate of capital formation is also very low. The serious capital deficiency in under-developed countries is reflected in the small amount of capital equipment per worker and in limited knowledge, training and scientific advance.

These are serious handicaps in economic development and here the banks can play a useful role:

The role of banks in economic development is to remove the deficiency of capital by stimulating savings and investment. A sound banking system mobilizes the small and scattered savings of the community, and makes them available for investment in productive enterprises.

In this connection, the banks perform two important functions:

(a) They mobilize deposits by offering attractive rates of interest, thus converting savings,, which otherwise would have remained inert, into active capital.

(b) They distribute these savings through loans among enterprises which are connected with economic development. In this way, they promote the development of agriculture, trade and industry.

It is difficult to see how, in the absence of banks, could small savings be stimulated or even made possible. It is also difficult to see who would distribute these savings among entrepreneurs. It is through the agency of the banks that the community’s savings automatically flow into channels which are productive.

The banks exercise a degree of discrimination which not only ensures their own safety but which makes for optimum utilization of the financial resources of the community. We see that in India the period of economic development has coincided with a phenomenal increase in bank deposits—and bank offices.

Thus, the banks have come to play a dominant and useful role in promoting economic development by- mobilising the financial resources of the community and by making them flow into the desired channels. The Indian banks are now playing a very active role in fostering economic development of the country.

Role of Banks in the Economic Development of a Country
Role of Government in Economic Development of a Country
Role of Taxation in Financing Economic Development
Role of Government in Economic Development

350 Banking Essay Topic Ideas & Examples

🏆 best banking topic ideas & essay examples, 👍 good essay topics on banking, 🥇 interesting topics to write about banking, 📝 simple & easy banking essay titles, 💡 most interesting banking topics to write about, 📑 good research topics about banking, ❓ money and banking essay questions.

Log Book for Internship With Merrill Lynch Bank As regarding to new skills, I learnt new methods of analyzing companies in the stock market and how to present information gathered to the supervisors/advisors.
The Banking Model of Education In the banking concept of education, the teacher is considered to be knowledgeable and experienced in contrast to the students who are supposed to be “blank slates,” or, in other words, entirely ignorant of the […]
Money and Banking: General Information The essay gives the definition of money and gives a brief description of the functions of money. As a store of value, money can be saved reliably and then retrieved in the future.
Wellfleet Bank Case Study Under Group Risk Committee, the company further delegates duties to: reputational, country, operational, group credit, market risk, business risk, and business risk committees.
The Banking Concept of Education by Paulo Freire This is one of the details that should be taken into account by the readers. This is one of the pitfalls that should be avoided.
JPMorgan Chase Bank: Ratio Analysis The ratios are debt-to-equity, the interest coverage ratio, the equity ratio, and the debt-to-asset ratio. For the years 2017, 2018, 2019, and 2020, JPM had a fixed turnover ratio of 7.
Islamic Banking The involvement of institutions and government led to the application of theory to practice and resulted in the establishment of the Islamic banks”.
The 2008 Banking Crisis in the Documentary “Inside Job” Using the documentary “Inside Job”, the paper presented below asserts that the malpractices of different banking experts, the ethical dilemma revolving around ratings agencies’ actions, and the Gramm-Leach-Bliley and the Glass-Steagall Acts influenced the nature […]
Ethical Dilemma With the Bank Teller On the other hand, the bank calls for honesty in service and client protection, and given that the teller took the money without permission from an inactive account belonging to a customer it is professionally […]
Impact of Cyber Crime on Internet Banking The paper evaluates a con article on ‘The impact of cybercrime on e-banking’ [1]. H2: Identity theft will have a negative impact on the adoption of electronic banking.
Traditional Versus Modern Banking Essay Traditional banking is characterized by the application of strict regulations, while modern banking is differentiated by the introduction of new laws that resulted in the deregulation of key aspects of the banking industry.
Bank of America’s Business Model Elements The organizational structure leverages Bank of America in the following ways. Bank of America has categorized its throughputs into five categories, which are the core products, processes, and services offered.
Wells Fargo Banking Scandal: Ethical Analysis The structure and the business model of Wells Fargo allowed the emergence of the working environment that incited the employees to unethical behaviors.
Ijtihad in Islamic Banking Even though Shariah principles forms the main legal foundation in which most of Islamic banking products and services are based, Ijtihad enables the flexibility of the Shariah principles to suit the changing needs of the […]
Money: Evolution, Functions, and Characteristics It acts as medium of exchange where it is accepted by both buyers and sellers; the buyer gives money to the seller in exchange of commodities.
Personal and Organizational Development in Banking My career plan is as in the figure below: – My career goal is to find a job in a bank and gradually grow through the ranks as I gain financial management related skills and […]
Customer Satisfaction Management in Banking Sector This fact and a pivotal role of customer satisfaction in the service segment highlighted the essentiality of conducting additional research to discover the most suitable research methods.
Role of Central Bank If central bank offers credit to the banks at a higher rate, then the rate of interest that commercial banks will offer loans to the public will be high; this reduces the attractiveness of the […]
Bank’s Provided Opportunities to Attract Consumers The offers are the following, to choose the credit card which backs cash when the consumer makes an online purchase, the other option is take the credit card which backs cash when the consumer makes […]
Commercial Bank of Australia Ltd vs. Amadio The decision by the court held that the bank manager and the commercial bank were aware of the special disadvantage of the Amadios and made no substantive efforts to ensure that Amadio clearly understood the […]
The Concept of Usul Fiqh and Qawaid Fiqhiyyah: Shariah and Islamic Banking For such convictions, this essay explores the concept of Usul Fiqh and Qawaid Fiqhiyyah in respect to issues regarding the influence of Shariah on Islamic banking practices Under the Islamic community, Fiqh is a terminology […]
Sustainable Development: The Banking Sector Financial regulators need to establish strong codes of conduct to ensure banks comply with social and environmental regulations. Banks need to include environmental and social compliance in the loan application criteria, before giving out credit […]
Corporate Governance Statements: BHP Billiton and National Australia Bank This is to say that corporate governance requirements differ from company to company and from a broader perspective, the success or failure of a given company differs with the corporate governance statement of the company.
Is Bonus Banking the Answer? Bonus banking is an incentive plan where some part of the bonus is put aside or banked in a reserve fund rather than paying out the entire bonus amount to the employee. The last variable […]
Barclays Bank Description Introduction Barclays bank is a UK-based Multinational Corporation headquartered in London and operates in the financial niche. The universal bank was established in 1860 in London as a goldsmith’s lending business offering people loans and saving options. The bank’s resilience in the corporate domain made it navigate all the challenges, and it still operates to […]
Grameen Bank’s Socially Responsible Innovation The bank targets the poor and marginalized with both financial assistance and information to help them grow. The Grameen Bank has continued to register impeccable performance on the social, economic, and environmental dimensions.
Market Elasticity’s in Banking Industry Price elasticity of markets “refers to the degree of change in quantity demanded or supplied of a commodity due to a change in price of the commodity” The formula is: P.E.
Safaricom’s Mobile Banking When Safaricom launched M-PESA, it commissioned agents in different parts of the country; the agent’s work was primarily to receive deposits from customers and electronically transfer this to the client’s M-PESA account.
Citibank’s E-Business Strategy and Competences Citibank has incorporated the use of e-business in its operation so that it can meet the needs of its customers and to withstand the market pressures which have been changing drastically.this paper has established the […]
Mobile Banking Innovation In the mobile industry, mobile banking is one of the recent innovations that have influenced the operations of the telephone/mobile phone industry positively.
Factors Which Impact Barclays Bank Political factors refer to the government policies that affect businesses and the extent to which the government intervenes in the economy.
The Pros and Cons of Investment Banking The investment banks are also referred to as proprietors since they are involved in trading of marketable instruments using their own money as opposed to that of investors.
Lloyds Banking Group’s Situational Analysis These products the company has diversified in various products and markets in an attempt to grow and increase its share in the market.
RBS Citizen Bank Culture and Change Secondly, RBS citizen should consider involving its employees in the design of new changes within the organization. In accordance to this, the RBS citizen administration team explains to their employees the motive of the changes.
The Employee Benefits Provided by the Bank of America In the process of applying for a job or assessing a certain company, it is crucial to learn about their advantages and unique features. In conclusion, Bank of America features various benefits that provide employees […]
Legal Issues in the Banking Industry The second problem is the complexity of banking operations for foreigners and the low-educated segments of the population. Thus, in banking, employees often face the problems of sexual harassment, complex mechanisms for clients, and digitalization.
Cryptocurrency and Its Impact on the Banking Industry Advanced coding is used to store and transfer cryptocurrency data between the wallet and a public ledger, and encryption is used to confirm transactions.
Overfitting and Bias-Variance Trade-Off in Banking While the training set represents most of the data, the testing set is used to test accuracy by measuring performance separately in the two separate parts of the data set.
Digital Trends & Sustainability in Banking It would be accurate to refer to banking as the financial hub of the economy because it is a major industry in the service sector.
The National Bank of Kuwait’s Improvement However, the constant improvement of technology and the introduction of innovations forced the bank to reconsider its policy and introduce a new system.
Ransomware in the US Banking Industry The mismatch can lead to a lack of trust and reputational damages. Data pertaining to the business plans and visions can also be accessed, making it vulnerable.
Tesla Inc.’s Banking Structure and Investments According to Saberi, it represents almost 4% of the world GDP, and, in the context of developed economies, 1% of automotive industry growth triggers respective 1,5% growth in the country’s GDP. Due to the specificity […]
Leadership at Qatar National Bank This paper examines in detail the phenomenon of leadership and its classic types in the light of improving the overall effectiveness of the work team.
Interpersonal Leadership Skills in Bank of America However, it is clear that the issue is not the demographics but the inefficient leadership in the company and the lack of interpersonal skills that would make people want to work at Bank of America.
Big Data Analytics in Central Banking In addition, the rate is integral to the overall cost of living, which parameter is in a cause-and-effect relationship with inflation.
Workplace Inclusivity at International Bank of Commerce Even if employees of color do not ascribe significance to the unequal distribution of power in the bank, the lack of diversity is evident.
Abu Dhabi Commercial Bank PJSC The discussion takes a general overview of the company, its mission and vision statements, strategic goals, and key objectives. The key objectives Abu Dhabi Commercial Bank wants to realize include: Growing transaction volumes and assets […]
Banking System: The Brief Analysis This is a fictional story that comes perilously near to the reality about the basic foundations of modern society. The primary objective of this story is to demonstrate reality’s simple math and the existing banking […]
Bank Pekao S. A.: Performance and Strategy Compared to its peers in Poland, Bank Pekao is uniquely placed as it launched a brokerage house and made practical biometrics technology in the banking industry, contributing heavily to the bank’s assets quality and investment […]
Financial Analysis of Al Ahli Bank of Kuwait Al Ahli Bank of Kuwait’s main competitors include Commercial Bank of Kuwait SAK, Gulf Bank KSCP, Burgan Bank SAK, and the National Bank of Kuwait.
Banking Sector of the United Kingdom At the same time, the banking sector of the United Kingdom had to balance between its financial losses and the ability to provide loans and debt-moratoria in order to support the country’s financial stability. In […]
Case Study of Hong Kong Shanghai Banking Capital From HSBC’s perspective, money laundering represents one of the most significant internal risks due to the worldwide presence, especially in certain economic areas with facilitated financial regulation and considerable economic influence, such as Hong Kong […]
Risk Factors Affecting Bank Nordik’s Operations and Risk Management Control measures adopted by the firm to manage these risk categories are explored in this investigation and the findings used as a justification for the development of a robust risk management plan.
The Albilad Capital Bank’s Mission and Vision Since the bank is striving to renew its mission and vision from the start, it is crucial to identify the values and vectors of direction.
National Australia Bank’s Sustainability Challenges One of the reasons for the success of NAB is the overall strategy of the company, which focuses its capital management on adequacy, efficiency, and flexibility, maintaining the economic balance to support and strengthen the […]
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The Lebanese-Canadian Bank’s Money Laundering The bank was later banned from using the dollar by the American treasury; this resulted in the collapse and eventual sale of the bank.L.C.B.had to pay a settlement fine of one hundred and two million […]
Alonzo vs. Chase Manhattan Bank, NA Case Study However, the author provides an insight into the matter by claiming that the policy concerning workplace discrimination took a dramatic turn in the early 1960s upon adoption of the Title VII of the Civil Rights […]
Political Theories and the World Bank Known as ‘power politics’ or means to exercise power World Bank massive financial institution which poorer nations depend on for subsidies Manner of soft power of the richer states contributing to the World Bank […]
Misconduct in Banking, Superannuation and Financial Services The company was included in the Royal Commission report due to ASL and NM releasing the trustee duties of their funds because of the AMP Group membership.
Sexual Harassment in Meritor Savings Bank vs. Vinson Case Mechelle Vinson, a defendant and a former employee of the plaintiff bank, filed a lawsuit against the bank and its bank manager Sidney Taylor. Sidney Taylor was the vice president of the bank and the […]
Considerations in Investment Banking However, to ensure a fruitful outcome, the CFO should choose a qualified and experienced investment banker to represent the facility. Secondly, the selected investment banking firm is expected to act as both a matchmaker and […]
The Impact of Bank on the Cost of Financial Intermediation Also, since the two variables are not controlled; bank concentration and national institutions, the research argues, however, that the measures of concentration capture the efficient structure theory and market power theories.
Hongkong and Shanghai Banking Corporation: Approach to Operating in China According to Luthan and Doh, centralization played a significant role in HSBC’s success in the new market. It was also the first company to establish a locally incorporated entity in Taiwan and Vietnam.
A Problem in Implementation of CSR in the U.S. Banking Industry Corporate social responsibility is essential in this age of intense globalization and competition – essential for firms to survive in the competition and also important for firms.
The Bank of America Corporation: Planning & Organizational Analysis The Bank may use environmental adaptation planning activities to enhance external relations with stakeholders such as customers, governments, suppliers and the public.
Digitalization of E-Commerce in Bank of Ireland The interview with the Senior Director in the Property Finance division of Corporate Banking, Michael Murray, revealed the importance of the advance of digitalization for the Bank of Ireland. These and other technologies will enable […]
The 1920 Farrow’s Bank Failure and Its Causes In this context, the company would be resilient to any stresses, and the outcome of the situation may be the opposite.
The Mountain Bank’s Strategy Analysis The most suitable competitive business strategy, in the case of the Mountain Bank is to build the presence in the market of consumer lending and corporate banking.
Banking: Financial Transaction Risks In that case, even the losses-free termination of the transaction would be a failure since the goal of acquisition would remain unachieved.
Bahrain Development Bank: Analysis To identify and develop ways of assessing learning at the working station to facilitate the employees’ skills and competencies. To identify ways of integrating training capability and focus on the organizational processes through skills acquisition […]
ICBC Bank – China: Overview The shifted focus of ICBC’s policy became the major contributor to the growth of the company on the international market and the subsequent cultural changes.
Customers’ Perceptions of M-Banking To find answers pertaining to the major objectives of the study, the gathered data was analysed using SPSS v.23. An exploratory factor analysis was run to group the existing variables into factors, and also to […]
“Attitudes Towards Mobile Banking” Article by Sohail & Al-Jabri In the introduction of the article, much background information, an overall evaluation of the situation in the banking industry, and the purposes of the study are discussed.
The Bank of Toroda: A Stakeholder Approach “Stakeholders are persons, organizations and groups that have to be considered by managers, directors as well as front office workers.”
Corporate Bias in the World Bank Group’s International Centre The institution judges the Pan Rim case neglecting the El Salvador government’s views, local communities, and the Catholic Church. It does not prioritize the protection of the environment and human rights.
Alinma Bank Industry Analysis. Case Study The demand for the services is another essential factor that shows the industry is profitable. The presence of many investors in the country shows that the demand for financial services is high.
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Phishing Victimization on Internet Banking Awareness Therefore, the study is meant to determine and evaluate consumer susceptibility to e-banking victimization through phishing attacks. Subsequently, the study will be designed to evaluate the effectiveness of phishing victimization training to E-banking consumers.
ICT: E-Banking and Firm Performance ICT is concerned with storage, retrieval, manipulation and transmission of digital data. ICT involves software, hardware and systems.
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Hongkong and Shanghai Banking Corp and Wells Fargo Speaking of the Income Statement, Wells Fargo wisely divides it into interest income and expense and non-interest income and expense, and this aspect eases the overall calculations of financial ratios.
Analysis of Al Hilal Bank Launch At the time when Al Hilal was launched, the situation in the world financial system was not favorable. It can be concluded that the banking market at the UAE was not favorable at the time […]
Noor Bank’s Balance Sheet and Income Statement The bank’s operating income from Islamic banking and sukuk amounted to more than 895 million AED compared to 678 million AED in the previous year.
Banking Institution and Transaction Regulations In the case of Brittany, it is the duty of the bank to authenticate all transactions on her account. In the process of negotiation, most parties often focus on the substance of the deal and […]
Bank of America’s Strengths and Weaknesses Interestingly, even non-banking institutions such as Quicken Loans and Leader Bank have started to claim a share of the market held by Bank of America. The root cause of the Bank’s mortgage troubles emanated from […]
Bank of America’s External Analysis in 2013 Among the major lenders in Massachusetts, for instance, Bank of America was the only bank that recorded a notable decline in the volumes of purchase and refinancing loans relative to other years. Apparently, competition has […]
Sales Portfolio: A Bank Mortgage and Marketers Although a mortgage has several advantages to both the commercial institution and the customer, it has its share of disadvantages. Many clients are reluctant to take up a mortgage because of the high interest rates.
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The Essence of the Islamic Banking System Riba of the Quran is called Riba An-Nasiyah and riba of the of Sunnah is called Riba Al Fadl. In the context of Islamic banking system, gharar is excessive uncertainty.
Factors Effecting Bank – Borrower Relationship in UAE The Middle East region’s banking industry is one of the fastest growing in the world. It is projected that the industry will get even better in the future due to the nature of the business […]
Bank of China Limited: Overview That said the objective of my effort is to present a report on the Bank of China’s IPO of 2006. This listing was exceptional since it was the only bank of China that had managed […]
Banking Industry: Successes and Failures These banks are regulated by the federal government and are required to be members of the Federal Reserve. However, these banks are not compelled to be members of the Federal Reserve.
Mortgages Offered by the RBC Royal Bank From your profile and to the best of my knowledge, I take pride to inform you that we have five financial investment products that best suit you.
Banking and Financial Markets: Asset-Backed-Securities Thus, there are four notable main stages in the process of creating the asset-backed securities and these include: Segregation of assets from originator or seller Creation of a specialized functional vehicle to seize the asset […]
Analyzing and Managing Systematic Risks in Banking Risk assessment is done to ascertain the nature of task before deciding the strategy of responding to it. Analysis and management of risks requires one to identify the nature of the risk involved.
Islamic Banking in Dubai and the UAE In an Islamic environment, the approach to financial operations such as the law of contracts, nature of property, interest rates and business transactions is quite different from the rest of the world.
Deutsch Bank Analysis and Performance Forecast The big bonus for banks came in the form of the Securitization Bill, which gave banks and institutions opportunity to recover from bad debts.
International Banking: New Basel The combination of the four changes in 2004 intended to speed up off-balance sheet mortgage securitization as the main avenue to drive the revenue together with the share price of banks.
Barclays Bank: Management Accounting Report This team assists the management in the gathering of information that is unilaterally used in management accounting to address specific challenges in the bank.
BNP Paribas International Banking Networks In the United States, the bank has a strong presence in the western part of the country, whereas, in Asia, it has fixed a secure and fast-growing business.
Riyadh Bank: The Historical Financial Analysis By the end of the third quarter of the year 2011, the organization has recorded a 15% increase in its net profit.
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Cost Accounting Essay Topics
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Chicago (A-D)
Chicago (N-B)

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Finance & Development Magazine

Banks: At the Heart of the Matter

Jeanne Gobat

Back to Basics

Credit: ISTOCK / RASTUDIO

BACK TO BASICS COMPILATION

Institutions that match up savers and borrowers help ensure that economies function smoothly

YOU’VE got $1,000 you don’t need for, say, a year and want to earn income from the money until then. Or you want to buy a house and need to borrow $100,000 and pay it back over 30 years.

It would be difficult, if not impossible, for someone acting alone to find either a potential borrower who needs exactly $1,000 for a year or a lender who can spare $100,000 for 30.

That’s where banks come in.

Although banks do many things, their primary role is to take in funds—called deposits—from those with money, pool them, and lend them to those who need funds. Banks are intermediaries between depositors (who lend money to the bank) and borrowers (to whom the bank lends money). The amount banks pay for deposits and the income they receive on their loans are both called interest.

Depositors can be individuals and households, financial and nonfinancial firms, or national and local governments. Borrowers are, well, the same. Deposits can be available on demand (a checking account, for example) or with some restrictions (such as savings and time deposits).

Making loans

While at any given moment some depositors need their money, most do not. That enables banks to use shorter-term deposits to make longer-term loans. The process involves maturity transformation —converting short-term liabilities (deposits) to long-term assets (loans). Banks pay depositors less than they receive from borrowers, and that difference accounts for the bulk of banks’ income in most countries.

Banks can complement traditional deposits as a source of funding by directly borrowing in the money and capital markets. They can issue securities such as commercial paper or bonds; or they can temporarily lend securities they already own to other institutions for cash—a transaction often called a repurchase agreement (repo). Banks can also package the loans they have on their books into a security and sell this to the market (a process called liquidity transformation and securitization ) to obtain funds they can relend.

A bank’s most important role may be matching up creditors and borrowers, but banks are also essential to the domestic and international payments system —and they create money .

Not only do individuals, businesses, and governments need somewhere to deposit and borrow money, they need to move funds around—for example, from buyers to sellers or employers to employees or taxpayers to governments. Here too banks play a central role. They process payments, from the tiniest of personal checks to large-value electronic payments between banks. The payments system is a complex network of local, national, and international banks and often involves government central banks and private clearing facilities that match up what banks owe each other. In many cases payments are processed nearly instantaneously. The payments system also includes credit and debit cards. A well-operating payments system is a prerequisite for an efficiently performing economy, and breakdowns in the payments system are likely to disrupt trade—and, therefore, economic growth—significantly.

Creating money

Banks also create money. They do this because they must hold on reserve, and not lend out, some portion of their deposits—either in cash or in securities that can be quickly converted to cash. The amount of those reserves depends both on the bank’s assessment of its depositors’ need for cash and on the requirements of bank regulators, typically the central bank—a government institution that is at the center of a country’s monetary and banking system. Banks keep those required reserves on deposit with central banks, such as the U.S. Federal Reserve, the Bank of Japan, and the European Central Bank. Banks create money when they lend the rest of the money depositors give them. This money can be used to purchase goods and services and can find its way back into the banking system as a deposit in another bank, which then can lend a fraction of it. The process of relending can repeat itself a number of times in a phenomenon called the multiplier effect. The size of the multiplier—the amount of money created from an initial deposit—depends on the amount of money banks must keep on reserve.

Banks also lend and recycle excess money within the financial system and create, distribute, and trade securities.

Banks have several ways of making money besides pocketing the difference (or spread) between the interest they pay on deposits and borrowed money and the interest they collect from borrowers or securities they hold. They can earn money from:

income from securities they trade; and
fees for customer services , such as checking accounts, financial and investment banking, loan servicing, and the origination, distribution, and sale of other financial products, such as insurance and mutual funds.

Banks earn on average between 1 and 2 percent of their assets (loans and securities). This is commonly referred to as a bank’s return on assets.

Transmitting monetary policy

Banks also play a central role in the transmission of monetary policy , one of the government’s most important tools for achieving economic growth without inflation. The central bank controls the money supply at the national level, while banks facilitate the flow of money in the markets within which they operate. At the national level, central banks can shrink or expand the money supply by raising or lowering banks’ reserve requirements and by buying and selling securities on the open market with banks as key counterparties in the transactions. Banks can shrink the money supply by putting away more deposits as reserves at the central bank or by increasing their holdings of other forms of liquid assets—those that can be easily converted to cash with little impact on their price. A sharp increase in bank reserves or liquid assets—for any reason—can lead to a “credit crunch” by reducing the amount of money banks have to lend, which can lead to higher borrowing costs as customers pay more for scarcer bank funds. A credit crunch can hurt economic growth.

Banks can fail, just like other firms. But their failure can have broader ramifications—hurting customers, other banks, the community, and the market as a whole. Customer deposits can be frozen, loan relationships can break down, and lines of credit that businesses draw on to make payrolls or pay suppliers may not be renewed. In addition, one bank failure can lead to other bank failures.

Banks’ vulnerabilities arise primarily from three sources:

a high proportion of short-term funding such as checking accounts and repos to total deposits. Most deposits are used to finance longer-term loans, which are hard to convert into cash quickly;
a low ratio of cash to assets; and
a low ratio of capital (assets minus liabilities) to assets.

Depositors and other creditors can demand payment on checking accounts and repos almost immediately. When a bank is perceived—rightly or wrongly—to have problems, customers, fearing that they could lose their deposits, may withdraw their funds so fast that the small portion of liquid assets a bank holds becomes quickly exhausted. During such a “run on deposits” a bank may have to sell other longer-term and less liquid assets, often at a loss, to meet the withdrawal demands. If losses are sufficiently large, they may exceed the capital a bank maintains and drive it into insolvency.

Essentially, banking is about confidence or trust—the belief that the bank has the money to honor its obligations. Any crack in that confidence can trigger a run and potentially a bank failure, even bringing down solvent institutions. Many countries insure deposits in case of bank failure, and the recent crisis showed that banks’ greater use of market sources of funding has made them more vulnerable to runs driven by investor sentiment than to depositor runs.

The need for regulation

Bank safety and soundness are a major public policy concern, and government policies have been designed to limit bank failures and the panic they can ignite. In most countries, banks need a charter to carry out banking activities and to be eligible for government backstop facilities—such as emergency loans from the central bank and explicit guarantees to insure bank deposits up to a certain amount. Banks are regulated by the laws of their home country and are typically subject to regular supervision. If banks are active abroad, they may also be regulated by the host country. Regulators have broad powers to intervene in troubled banks to minimize disruptions.

Regulations are generally designed to limit banks’ exposures to credit, market, and liquidity risks and to overall solvency risk. Banks are now required to hold more and higher-quality equity—for example, in the form of retained earnings and paid-in capital—to buffer losses than they were before the financial crisis. Large global banks must hold even more capital to account for the potential impact of their failure on the stability of the global financial system (also known as systemic risk ). Regulations also stipulate minimum levels of liquid assets for banks and prescribe stable, longer-term funding sources.

Regulators are reviewing the growing importance of institutions that provide bank-like functions but that are not regulated in the same fashion as banks—so-called shadow banks—and looking at options for regulating them. The recent financial crisis exposed the systemic importance of these institutions, which include finance companies, investment banks, and money market mutual funds.

Jeanne Gobat is a Senior Economist in the IMF’s Monetary and Capital Markets Department.

Opinions expressed in articles and other materials are those of the authors; they do not necessarily reflect IMF policy.

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What Is A Bank And How Does It Work?

Updated: Mar 31, 2022, 2:59pm

Banks and other financial institutions offer products and services to help you manage your money, but do you know how they work?

If you have a checking account , savings account, credit card, or loan, banks are integral to your financial life. Banks and the financial services industry are an important part of the economy because they provide the means for people to borrow money, make investments, save for the future and handle smaller tasks (like making deposits and paying bills).

Here’s a closer look at banks, how they work and why they matter.

What Is a Bank?

A bank is a financial institution regulated at the federal level, state level or both. The primary role of banks is to take deposits and make loans. But banks can offer a wide range of products and services, including:

Deposit accounts (checking accounts, savings accounts, CDs, money market accounts)
Loans, including mortgage loans, auto loans and personal loans
Credit cards
Check-cashing services
Wealth management services
Business banking

Most banks in the United States are insured by the Federal Deposit Insurance Corporation (FDIC). The FDIC covers deposit accounts, up to specified limits, in the event that a bank fails. The current FDIC coverage limit is $250,000 per depositor, per account ownership type, per financial institution.

There are several types of banks (see Types of Banks below). Here we’re mainly referring to retail banks.

What Is a Financial Institution?

A financial institution is an entity that engages in transactions involving the movement of money or financial assets from one place to another. Examples of financial institutions include:

Credit unions
Savings and loan associations
Small business investment companies
Mortgage lenders
Investment broker-dealers
Credit card companies
Insurance companies

The type of financial institution typically defines the type of activities or financial transactions it engages in. For example, mortgage lenders make home loans while credit card companies extend revolving lines of credit to consumers.

Financial institutions can be subject to regulation by the federal government. Investment broker-dealers, for instance, are regulated by the Securities and Exchange Commission (SEC).

How Banks and the Banking Industry Work

Banks, whether brick-and-mortar institutions or online, manage the flow of money between people and businesses. More specifically, banks offer deposit accounts that are secure places for people to keep their money. Banks use the money in deposit accounts to make loans to other people or businesses.

In return, the bank receives interest payments on those loans from borrowers. Part of that interest is then returned to the original deposit account holder in the form of interest—generally on a savings account, money market account or CD account. Banks primarily make money from the interest on loans and the fees they charge their customers.

These fees can be tied to specific products, such as bank accounts or related to financial services. For example, an investment bank that offers portfolio management to investors can charge a fee for that service. Or, a bank may collect an origination fee when granting a mortgage loan to a homebuyer.

Banking is a highly regulated industry. The Federal Reserve System oversees banks and other financial institutions and coordinates with state regulatory agencies to help ensure banks follow the proper guidelines. Banks are also subject to regulation by other federal agencies, including the Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corporation (FDIC) .

Types of Banks

“Bank” is a broad term that encompasses a number of different financial institutions. Understanding the various types of banks matters as they aren’t all alike in the services or products they provide and the functions they serve. Some are consumer-facing, meaning they directly serve the general public. Others play a more strategic role in the flow of money through the economy. Take a peek under the banking umbrella. You’ll find the following:

Central banks
Retail banks
Commercial banks
Investment banks
Shadow banks

Here’s more on how each type of bank works and what they’re designed to do.

Central Banks

Central banks manage the supply of money for a country or group of countries. These banks are responsible for setting monetary policy, overseeing the movement of currency and establishing interest rate baselines. In short, they’re the backbone of a nation’s banking system.

In the U.S., the Federal Reserve is the central bank. The Federal Reserve System is composed of 12 regional federal banks. The Federal Reserve’s earnings come from interest on securities the bank owns and net earnings are paid to the U.S. Treasury. Banks within the Federal Reserve System perform four specific duties, including:

Supervising and examining state member banks
Lending to depository institutions
Providing key financial services to help manage the nation’s payment system
Examining financial institutions

Those functions are central to how banking works in the U.S. and they make it possible for you to do everything from swiping your debit card when shopping online to getting a mortgage.

Retail Banks

Retail banks are probably what most people think of when they think of banking. These banks offer loans, deposit accounts and other banking services to everyday customers, including small business owners. Retail banks can be brick-and-mortar institutions with branches or online banks that allow you to manage your money exclusively through an app.

Banking services offered by nonbank entities may also fall into this category. For example, a growing crop of fintech startups, also called neobanks , offer deposit accounts just like you’d find at a bank. These companies partner with existing banks to offer FDIC-insured banking products and services, though they’re not banks themselves.

Commercial Banks

Commercial banks typically cater to businesses or corporations, although they can also serve individual banking customers’ needs. Similar to retail banks, commercial banks also can make loans and offer deposit accounts and other banking services such as international banking or payment processing

Commercial banks generally provide a wide range of services. A commercial bank, for example, may grant real estate loans or business equipment loans, charging borrowers interest and fees for the privilege of borrowing money. The same financial institution can offer commercial banking services alongside retail banking services.

Investment Banks

Investment banks can participate in securities trading, manage investor accounts or do a little of both. An investment bank can act as a go-between for investors who want to put money into the markets by helping with the purchase or sale of securities. They also can offer investment advice to clients.

Aside from assisting retail investors, investment banks perform other functions. For example, they can assist with the underwriting process when a company is planning its Initial Public Offering (IPO). An investment bank may also help facilitate mergers and acquisitions on behalf of corporate entities.

Shadow Banks

Shadow banks aren’t like traditional banks regarding what they do or how they’re regulated. These nonbank financial institutions are generally unregulated and primarily focus on making investments in credit and debt instruments. Insurance companies and hedge funds are examples of shadow banking institutions.

Shadow banking and shadow banks played a role in the 2008 financial crisis .

Savings and Loan Associations

Savings and loan associations aren’t strictly banks either. These financial institutions specialize in helping people borrow money to buy or refinance a home they already own. A saving and loan association may also be called a “thrift” because once upon a time, they only offered savings deposit accounts once upon a time.

Rather than being covered by the FDIC, savings and loan associations are typically insured by the Savings Association Insurance Fund (SAIF).

Credit Unions

Credit unions , sometimes called cooperative financial institutions, offer many of the same services as traditional retail banks. The difference is that while retail banks typically operate for profit, credit unions don’t.

Credit unions are formed by “members” who pool their funds together and control the institution. Membership in a credit union is required to open an account. These requirements may be based on geography, employment, religious affiliation or military affiliation. Rather than being FDIC insured, credit unions generally are insured by the National Credit Union Administration (NCUA).

Credit Union vs. Bank

Banks and credit unions both serve the same general purpose: Helping consumers and small businesses to manage their money. They also tend to offer similar banking products, such as:

Checking accounts
Savings accounts
Certificates of deposit (CDs)
Money market accounts (MMAs)
Personal loans and lines of credit
Business bank accounts
Business loans

Where they differ lies largely with how they operate. As mentioned above, banks tend to operate on a for-profit basis while credit unions do not. Credit unions may charge fewer fees to their customers or offer lower interest rates on loans.

Banks and credit unions offer the same level of protection in the event of failure, but different entities insure them. Banks are generally FDIC-insured, while the NCUA insures credit unions. There’s usually no membership requirement with banks to open an account the way there are with credit unions.

Credit Unions	Banks

Types of Bank Accounts

Consumers usually view banks as places to keep money or as places to go to borrow money. The types of accounts you can have with a bank may include:

Money market accounts
Credit card accounts
Mortgage loans
Student loans

Checking Accounts

A checking account is a deposit account that allows you to deposit money, pay bills and make purchases by writing checks or using your debit card. Checking accounts are designed to hold the money you plan to use in the near term. Depending on the bank, you may pay a monthly maintenance fee to own a checking account. Banks can charge other fees as well, including overdraft fees .

Processing transactions is another important job for banks, which goes on behind the scenes with checking accounts. When you swipe your debit card or use your ATM card to make a withdrawal, that transaction has to be approved by your bank before it can be processed. Banks also make it possible to make electronic Automated Clearing House transfers or wire transfers between individuals, businesses and financial institutions.

Savings Accounts

Savings accounts are deposit accounts designed to hold the money you don’t necessarily plan to spend right away. These accounts often pay interest to savers, though some banks may offer higher interest rates than others.

Depending on the bank, you may be able to access money in your savings account at a branch, ATM or online. While the government has suspended the federal regulations limiting you to six withdrawals per month from a savings account, your bank may cap the number of withdrawals you can make. Or, the bank may charge a fee for each withdrawal over six.

Money Market Accounts

Money market accounts typically pay interest like a savings account and provide withdrawal options similar to a checking account. For example, you may be able to write checks, make ATM withdrawals or make purchases using a debit card. Again, though banks can limit the number of withdrawals you can make from savings accounts and money market accounts each month.

A money market account may be a good option for saving money you’ve earmarked to spend later. For example, if you’re saving money toward a down payment on a home, you may choose to keep those funds in a money market account that includes check-writing abilities. When you’re ready to make your down payment, you can simply write a check from that account (or schedule a wire transfer).

Certificates of Deposit

CD accounts are time deposits that pay interest over a set period. Common CD terms typically range from 28 days to 60 months. But it’s possible to find CDs with terms as long as 10 or 20 years. Generally, the longer the term, the higher the interest rate you can earn. Banks can charge a penalty for withdrawing money from a CD before reaching its maturity date.

CDs are better suited for saving money you know you won’t need before the account matures. For example, you might use a CD to save money for a car you plan to buy in the next two years or a wedding that’s 18-months away. They’re less liquid than savings accounts or money market accounts.

How To Choose a Bank

When choosing a bank, it’s important to do your research. Start by looking at the types of products and services offered. Ideally, you want to find a bank that offers the accounts or services you need, whether a checking account, savings account or loan.

Next, consider the interest you can earn on deposits when opening a new savings, CD or money market account. You can also look at whether a bank offers interest on checking balances, though this is less common.

While banks can pay interest to savers, they also can charge them fees. The most common fees you might pay to a bank include:

Monthly maintenance fees
Excess withdrawal fees
Early withdrawal penalties for CD accounts
Overdraft or non-sufficient funds fees
Out-of-network ATM withdrawal fees
Debit card replacement fees
Cashier’s check, certified check and money order fees

You may avoid many of these fees by choosing an online bank over a traditional bank. Online banks tend to have lower overhead costs than brick-and-mortar banks, which means they can pass on those savings to customers in the form of lower fees. For the same reason, you may also find better interest rates on deposit accounts at online banks.

Finally, look at the convenience and service a bank offers. If you’re choosing a brick-and-mortar bank, how many branches does it have? Are they easily accessible to where you live and work? And does the bank offer a user-friendly online and mobile banking experience?

With an online bank, consider whether it has a robust mobile app. Can you access your accounts at an ATM and if so, will you pay a fee? Asking these kinds of questions can help you narrow down the list of banks.

Find The Best Online Banks Of 2024

Bottom line.

When comparing banks, check the range of products and services offered, as well as the fees and interest rates they pay or charge for borrowing money. Also, keep convenience in mind regarding the different ways you can access your money.

Frequently Asked Questions (FAQs)

How do central banks govern the banking industry.

Central banks implement a nation’s monetary industry and control the money supply. For example, when the economy is on the verge of overheating, the central bank may raise interest rates to cool off borrowing and spending. If the economy is sluggish, on the other hand, the central bank may lower rates to boost spending and encourage borrowing.

How do investment banks make money?

Investment banks can make money by charging fees for their services and earning commissions when they sell certain products. For example, an investment company may earn a commission for selling a certain type of mutual fund to investors.

Where is the best place to bank?

The best bank to bank with is the one that offers the products and services that best fit your needs. For example, if you need a checking account with no monthly fees or a savings account that offers a highly competitive APY, you may choose an online bank over a traditional bank. But if you need or prefer branch banking access, you may choose a brick-and-mortar bank instead.

Which type of bank account is best for everyday transactions?

A checking account is designed for everyday financial transactions, including depositing paychecks, paying bills, transferring money and making purchases via a linked debit card. Checking accounts can give you flexibility in managing and accessing your money, though it’s important to find one that offers the best combination of features and low fees.

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Rebecca Lake is a certified educator in personal finance (CEPF) and a banking expert. She's been writing about personal finance since 2014, and her work has appeared in numerous publications online. Beyond banking, her expertise covers credit and debt, student loans, investing, home buying, insurance and small business.

Essay on Importance of Saving Money

Students are often asked to write an essay on Importance of Saving Money in their schools and colleges. And if you’re also looking for the same, we have created 100-word, 250-word, and 500-word essays on the topic.

Let’s take a look…

100 Words Essay on Importance of Saving Money

Understanding money.

Money is a tool that helps us meet our needs. It’s important to understand its value at an early age.

Why Save Money?

Saving money is crucial. It helps us prepare for unexpected situations and achieve our goals.

Benefits of Saving

Saving helps us become financially independent and secure. It also teaches us discipline and planning.

How to Save?

Simple steps like cutting down on unnecessary expenses and setting aside a part of our pocket money can aid in saving.

250 Words Essay on Importance of Saving Money

Introduction.

Money is an essential part of our lives, facilitating the exchange of goods and services. One of the most important aspects of money management is saving, a habit that can significantly impact our financial security and future.

The Role of Savings in Financial Stability

Savings act as a safety net in times of financial distress. Unexpected expenses such as medical emergencies, vehicle repairs, or job loss can be easily managed if one has a sound savings plan. It reduces the reliance on credit, thereby minimizing debt and the associated stress.

Savings and Investment Opportunities

Savings also open doors to investment opportunities. The money saved can be invested in stocks, bonds, or real estate, which can generate additional income over time. This concept of compounding can lead to substantial financial growth, helping to achieve long-term goals like buying a home or planning for retirement.

Savings and Financial Freedom

Furthermore, saving money promotes financial freedom. It allows individuals to make choices based on their desires and not just financial constraints. Whether it’s pursuing higher education, starting a business, or traveling the world, a solid savings plan can make these dreams a reality.

In conclusion, the importance of saving money cannot be overstated. It provides financial security, enables investment opportunities, and promotes financial freedom. Cultivating the habit of saving can lead to a financially secure and fulfilling life.

500 Words Essay on Importance of Saving Money

The concept of saving money, financial independence and empowerment.

One of the most significant advantages of saving money is the financial independence it brings. When you save, you essentially create a financial buffer that can help you navigate unexpected expenses or financial emergencies. This independence can lead to a sense of empowerment, as it allows you to make decisions based on your best interests rather than immediate financial constraints. For college students, this could mean having the freedom to pursue internships in their field of interest, even if they’re unpaid, or investing in educational resources that can enhance their academic performance.

Securing the Future

Saving money also plays a crucial role in securing your future. By setting aside a portion of your income, you’re essentially investing in your future self. This could mean being able to afford a down payment on a house, funding your post-graduate studies, or even starting a business. The act of saving money can provide a safety net that allows you to take calculated risks and make significant life decisions without fear of financial ruin.

Mitigating Financial Risks

Encouraging responsible financial behavior.

Lastly, the practice of saving money encourages responsible financial behavior. It necessitates budgeting and conscious spending, skills that are invaluable in managing personal finances. For college students, learning to save money can provide practical experience in financial management, setting the foundation for a future of financial prudence and stability.

In conclusion, the importance of saving money extends beyond the immediate benefits of having extra cash on hand. It’s about financial independence, securing the future, mitigating risks, and fostering responsible financial behavior. It’s a habit that, when cultivated early, can lead to lifelong financial stability and independence. As such, it’s crucial for college students to understand and appreciate the value of saving money, as it’s an investment that yields significant returns in the long run.

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Essay for Bank Exams | Essay Topics for Banking Exams

Essay for Bank Exams : Almost every bank officer grade exam consist one paper of essay writing where aspirants have to write essay on the given topic. In banking sector essay writing topics are generally from banking and finance related however many times essay on current issues can also be asked. Here we have compiled a list of important essay topics for banking exams. These essay topics are most important for SBI PO , SBI CBO , IBPS PO , SIDBI Grade A , NABARD , IFSCA Assistant Manage, Bank of India PO and other banking descriptive exam etc.

Important Essay Topics for Banking Exams

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You can also read these important essays for banking exam by opening the topic. You can also download PDF of these essay for bank exams from here .

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These are also most important essay topics for banking exams Descriptive Paper. You can also read these essay for bank Exams by clicking on the essay topics. Hope you liked these important essay topics for banking exams and it helped you in your exam preparation.

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The Advantages of Being a Banker

If you are exploring business careers or simply writing an essay on the banking system, you'll likely find that many banks in your community have been in business for decades. The banking industry has existed for centuries, and it's expected to be a prominent part of society for the foreseeable future. But the sustainability of the industry and the positive outlook that creates for jobs are not the only perks of a banking career. Your career research or short essay on bankers and banking will reveal many tangible advantages to being part of this lucrative industry.

Fulfilling Career

Banking is a fulfilling career choice for individuals who want to help the public. Bankers play an essential role in society by protecting, investing and lending money. Many play a direct role in helping clients' make some of the most important decisions of their lives, such as saving for college, purchasing homes and planning for their business and retirement needs. Bankers also have opportunities to fulfill their civic desires. TD Bank says it gives millions of dollars to community-based nonprofit organizations every year, sponsors community events and programs and encourages its employees to contribute and volunteer to their communities.

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Bankers' schedules generally allow them to be off nights, weekends and holidays. But banks are opening more branches in more diverse locations, such as inside grocery stores or big-box retailers, which provides opportunities for people who want to work alternative schedules. TD bank, for example, intentionally provides employees with a variety of work options to address employees' varying needs. Bank of America offers wholistic wellness programs to help employees live well-rounded lives and stay healthy.

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Attractive Compensation

Compensation can vary greatly depending on a person's position, tenure and the bank for which she chooses to work. Still, bankers are usually paid competitive salaries. According to the U.S. Bureau of Labor Statistics, in 2019 the median annual salary of loan officers was $63,270 and the top 10 percent of loan officers earned more than $132,680. Financial managers earned a median annual salary of $129,890 with those in the 90th percentile earning at least $208,000, the BLS further notes.

In addition to their base salary, many bankers receive commissions, performance incentives and annual bonuses. High-level investment bankers who work in corporate finance or mergers and acquisitions receive bonuses that exceed their base salaries.

Generous Benefit Packages

Most bankers enjoy comprehensive benefits packages. Large banks typically offer medical, dental and vision insurance to its bankers and their families. Bankers have access to a retirement plan, life insurance, disability insurance and flexible spending accounts for health care and child care. Other commonly offered bank job benefits include paid time off, free financial services, adoption assistance and fitness programs.

Advancement Opportunities

Banks also tend to offer educational development and tuition assistance programs. Getting a degree or continuing education is not a waste of time in the banking industry. Financial firms are well-known for providing advancement opportunities and a career ladder for those who are talented and highly motivated. The BLS says many investment banks use an "up or out" policy where entry-level investment bankers are either promoted or terminated after two or three years, keeping the pipeline of opportunity flowing for newcomers.

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Ethical Banking

The core set of principles and ideals that govern how banks interact with their clients, their community, and the world in general

What is Ethical Banking?

Ethical banking involves consciousness of how banking practices affect society and the environment. Financial institutions that emphasize ethical practices seek profit like any other financial institution. However, they strive to generate earnings without sacrificing principles or causing harm.

The term is a fairly broad one, which means it covers a wide range of ideas and concepts under its umbrella. A wide scope of things is included, ranging from banks offering loans and financial assistance to start-ups that are environmentally friendly to those that serve struggling communities or help individuals looking for affordable housing.

The root of ethical banking is a core set of principles and beliefs. Ethical banks remain true to their core model of conduct, even if it does not particularly help them realize a profit.

Ethical banking is a fairly broad term used to describe banks that operate around a set of principles and ideals that are used to govern how they interact with their clients, their community, and the world in general.
While each bank is left to determine what principles will sit at its core, most have a few characteristics in common, which include community involvement, client screening, and consistency of internal and external ethics.
Ethical banking can help to build strong, financially capable communities. The reality, though, is that being held to a rigid set of principles can often prove difficult to implement from a purely practical point of view.

Basic Characteristics of Ethical Banks

Because ethical banking is such a broad term, banks enjoy a lot of flexibility when it comes to the exact nature of how they operate. That being said, there are a few key characteristics that nearly all banks maintain when it comes to ethical guidelines:

1. Screening clients

It is important for any bank to screen its clients, though the most common reason is to be certain that the client is financially sound . With ethical banking, however, screening clients is additionally important so that a bank does not end up working with companies and individuals who do not maintain ethical practices.

2. Getting involved in the community

Banks following ethical principles are typically eager to interact with their local communities and foster a healthy and prosperous local environment. Their guidelines may include things such as establishing funding for affordable apartment complexes , acting as a sponsor for a community event, or setting up college scholarships for high school students.

3. Consistency of ethics

Banks need to “walk the walk,” keeping both internal and external ethics consistent. Whatever the bank deems ethical externally must be maintained in-house. If, for example, an ethical bank declines to work with a client because the company doesn’t accommodate handicapped workers , it should accommodate staff with different types of handicaps.

The Pros and the Cons

Ethical banking encourages transparency, helps build strong communities, and establishes a set of principles and ideals that govern how and to whom finances flow. Banks that follow such a practice are also often the last chance available to many start-ups at getting the funding necessary to get off the ground.

The practical reality, however, is that while establishing a set of core principles to operate by is a noble endeavor, refusing to take on clients or work with organizations who somehow “violate” said principles can spell financial disaster, both for the clients and the bank.

More Resources

CFI offers the Financial Modeling & Valuation Analyst (FMVA)™ certification program for those looking to take their careers to the next level. To keep learning and developing your knowledge base, please explore the additional relevant CFI resources below:

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Essay On Importance Of Banking

WHY BANKING IS OF STRATEGIC SIGNIFICANCE TO NATION’S ECONOMY Banking plays a very useful and crucial role in economic life of Malaysia as it controls over a large part of the supply of money in circulation, and can influence the nature and character of production in the country. The significance of the industry can be summed up based on the general and important functions as follows: • Removing the deficiency of capital formation Economic development is not possible unless there is sufficient amount of capital accumulation/formation. Serious capital deficiency, resulting from low savings habits, is reflected in small amount of capital equipment per worker and the limited knowledge, training and scientific advance. Banks play a useful role …show more content…

With the sound banking system, it is possible for commerce and industry for extending their field of operation. Commercial banks act as an intermediary between buyers and the sellers. Goods are supplied on bank guarantees, making it viable for industry and commerce to cultivate and locate markets for their products. The risks are undertaken by the bank. When the risks have been set free by the banks, the industry can look forward to derive economies of the large size of the market. • Act as an engine of balanced regional development Commercial banks help in proper allocation of funds among different regions of the economy. The banks operate primarily for profits. When the banks lend their funds for more productive uses, their profits will be maximized. Introduction of branch banking makes it possible to choose between different regions. A region with growth potential attracts more bank funds. But in recent years, the approach of banks towards regional growth has been undergoing a change. Banks help create infrastructure essential for economic development. Thus banks are engines of balanced regional development in the country. • Financing agriculture and allied

President Jackson's Policy Toward The Second Bank Of The United States

Banking system is essential in our economics to maintain an effective circulation of money. The bank has functions for regulation of currency to aid strong economy. Distribution of the money is crucial to promote construction of the nation and prevention of bankruptcies. In our modern economic structure is supported and developed by the banking system. However, there was a period that the national bank was shut down by the government the consequence of the bank war.

Pros And Cons Of The House Of Representives

This bank could also help benefit the government to use it

Early Accomplishments Of The First Bank

He introduced plans for the First Bank of the United States, established in 1791 which was designed to be the financial agent of the Treasury Department. The Bank served as a depository for public funds and assisted the Government in its financial transactions. The First Bank issued paper currency, used to pay taxes and debts owed to the Federal Government. Hamilton also introduced plans for a United States Mint. Though he wanted the Mint to be a structural part of the Treasury, he lost the battle to Jefferson and it was established in 1792 within the State Department.

The Banking Concept

In “The ‘Banking’ Concept of Education” Paulo Freire addresses the inefficient and oppressive nature of modern education. Freire explains that the way in which teachers conduct educating is harmful to the students as well as the teachers. He proposes an alternative method to the banking concept called the problem-posing method. This method treats the teacher and students the same and allows for knowledge to flow in both directions. What Freire tries to convey in his work is that the way the act of educating is performed has a profound impact on the way the students materialize into the real world and how education can be used, intentionally or not, to control the students.

Pros And Cons Of The Federalist Parties

Although, the National Bank is not necessary, the purpose of this bank is to have a strong country with an equally as strong economy. The benefits of having a National

Examples Of The Impeachment Of Andrew Jackson

The national bank was incredibly biased in its working, which completely eliminated any equal opportunities for the nation’s people. The bank only favored those who were amongst the rich and powerful. For one, the bank has most frequently been run by those tied to Northern industry. Therefore, little funding or loans have been given to western expansion or to any other southern interests. In addition to these biased actios, Congress itself has granted exclusive privileges to wealthy bank stockholders.

Unit 2 Business Case Study

Without raising capital you have no room to attempt to branch out like bringing your business to another location. Also if you can’t raise capital there is no funding for your operation so you can’t get good equipment if needed. Finally if you can’t raise capital you can’t market your product you can’t afford advertising. These are just

What Was Banking Like In The Early Days Research Paper

What was banking like in the early days of the U.S.? Well, that’s a little bit tough to answer when you don’t have the correct knowledge about it. In the early days, the banking system was actually fluroushing with pleathera of money. Money was actually worth a lot more back then, than what it is today. Currency has decreased in value over time, and a lot of us don’t realize it.

Financial Literacy In Public Schools Essay

Source #3 would be the most beneficial for students researching new approaches to financial literacy courses, such as “just in time education,” wherein assistance is provided right before a financial decision has to be made. Source #3 also mentions the approach of having simple rules of thumb such as “save 15% of your income” to help people make smarter decisions. Source #3 provides helpful information to any student looking to find out more about the topic. Source #1 states that financial literacy courses in public schools almost always help out students in making better financial decisions in the future.

Differences In Banking Crisis

Bank crisis. Differences in banking structure US economy in the 1920s: There were two ways in which commercial banks could be characterised, i.e. nationally chartered banks and banks that were chartered by states. As branching was strictly forbidden by national regulators and most state regulators, this led to a majority of banks being unit banks. Unit banks were a serious problem in the twentieth century Great Depression especially, as it was “a system of banking in which the government restricts or does not permit a bank to open branch offices”.

Should Financial Literacy Be Taught In Schools Essay

Financial fears have grown increasingly common in our society. It seems that the pile of bills on the kitchen table continues to grow as the money in our wallets continues to shrink. Everyday there are those who are unable to sleep because the fear of not being able to make ends meet gnaws at them. Research shows that financial fears have become some of the most prominent fears in America. But why is this the case?

Pestel Analysis Of Banking Industry

(Appendix1 shows a complete list of banks in Malaysia). • Malaysian banking system is highly regulated/controlled by BNM and banking products are basically of similar/almost-identical nature. The tangible differentiation between competing banks is therefore minimal, as they have similar capability to market/sell their products, thus creating a very intense competition amongst all the players. • The industry has been around for a long time, and just about everyone who needs banking services already has them. Because of this, banks must attempt to lure clients away from competing banks e.g. by offering higher credit limit,

Strengths And Weaknesses Of The Banking Industry

I would frame the banking as an industry that is built on trust. Trust that is reaffirmed by the governments, and regulators. Banks have an imperative role in our economic growth, and development. Correspondingly, without the bank industry, there is no industry to replace them as the conduit for social and economic policy. Equally important, there is no industry to replace them as the key performer in creating our economies multiplier effect.

Short Essay On Online Banking

"In its simplest form, electronic banking may mean the provision of information about the bank and its products via a page on the internet" Daniel (1999). Daniel (1999), however, defines the term as "the provision of information and/or services by a bank to its customers via computer, telephone or television". A more developed service, as Daniel (1999) says, can provide the customers with a way to use the service through their accounts to accomplish the needed transactions and perform any desired purchases of products either online or any other electronic channel whether it is TV, telephone or automated teller machines (ATM). The severe competition pressures and the non-ending customers ' requirements force the banks to develop new technologies and tools.

Essay On Importance Of Financial Management

Financial management “is the operational and financing activity of a business that is responsible for obtaining and utilizing the funds necessary for effective operations. Thus, Financial Management is concerned with the effective funds management in the business process. Finance is interrelated functions which deals with marketing function, production function, Human Recourse function and Research & development activities of the business concern. Financial Management is concerned with the financing, acquisition and management of assets with some overall goal in minds. There are three major areas in Financial Management decision making.

More about Essay On Importance Of Banking

Maine Law Review

Home > JOURNALS > MLR > Vol. 60 > No. 2 (2008)

The Role of a Banking System in Nation-Building

John L. Douglas

It seems strange to have a discussion of nation-building devoted to the importance of a banking system. After all, when we think of nations, we think of constitutions, borders, and functioning governments. When we think of failed nations, we think of a lack of effective government, a loss of control over society, and a breakdown in law and order. Banks hardly figure into that discussion at all. Indeed, in our society, while banks play an important role, they usually reside quietly in the background. Many of us never set foot in a bank. Our paychecks may be deposited in a bank, and if we need cash (a somewhat rare occurrence these days), we will go to an ATM. Of course a bank may be involved somehow in giving us a credit card or a debit card and may be involved somehow in providing an automobile or home loan. In many ways, banks are simply part of the general noise and clutter of modern society. We pay attention when something goes wrong, but otherwise banks are sort of like washing machines. They do their job, occasionally need fixing, but it is hard to think that a washing machine (or a bank) is all that important in nation-building. This Essay proffers the proposition that a banking system is more than background noise. A banking system functions as the heart and lifeblood of any functioning economy. A banking system is the key to economic growth and development. It is essential to unlocking wealth, creating opportunities, providing jobs, and facilitating commerce. It provides a mechanism for individuals and businesses to participate in the global economy. Importantly, banks, when they do their jobs correctly, allow their customers to have a vested interest in a strong and stable society. However, one no more builds a nation by establishing a banking system than one builds a nation by writing a constitution. A banking system is important in part because of the elements required to make it function: a legal system that respects contracts and agreements, honoring the rights of both debtors and creditors; an independent central bank; a judiciary that follows the rule of law; and a government that understands the importance of strong, healthy banks and provides sound supervision and a legal framework within which they can operate. Only then can the banking system accomplish its primary roles—that of providing a safe haven for the funds of the public and a means to devote those funds in productive loans to build the economy. A healthy banking system, then, not only helps build a nation for what it does, it helps build a nation for what it requires.

Recommended Citation

John L. Douglas, The Role of a Banking System in Nation-Building , 60 Me. L. Rev. 511 (2008). Available at: https://digitalcommons.mainelaw.maine.edu/mlr/vol60/iss2/14

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Anil Singhvi Market Strategy August 27: Important levels to track in Nifty50, Nifty Bank today

Anil Singhvi's Strategy | Buy Nifty at 24,775-24,825, Nifty Bank at 50,700-50,850 Anil Singhvi Market Strategy: Zee Business Managing Editor Anil Singhvi shares his strategy for today's session on Dalal Street. Check out his take on key support and resistance levels for the Nifty and the Nifty Bank, and how he views the market.

Anil Singhvi Market Strategy : Zee Business Managing Editor Anil Singhvi expects support for the headline Nifty50 index to emerge at 24,875-24,950 levels and a strong buy zone at 24,775-24,825 levels on Tuesday, August 27. For the Nifty Bank, he expects support to come in at 50,925-51,050 levels and a buy zone at 50,700-50,850 levels.

He sees a higher zone for the headline index coming in at 25,050-25,125 levels and a "blue-sky zone" above the 25,125 mark. For the Nifty Bank, he expects a higher zone at 51,325-51,475 levels and a profit-booking zone at 51,575-51,650 levels.

Catch all the latest stock market updates here. For all other news related to business, market, tech and auto, visit Zeebiz.com .

Here's how anil singhvi sums up the market setup.

Global: Positive FII: Positive DII: Positive F&O: Neutral Sentiment: Positive Trend: Positive FII long positions at 55 per cent vs 52 per cent the previous day Nifty put-call ratio (PCR) at 1.31 vs 1.27 Nifty Bank PCR at 0.79 vs 0.86 India VIX up 1.8 per cent at 13.80

For existing long positions:.

Nifty intraday and closing stop loss at 24,800 Nifty Bank intraday stop loss at 50,950 and closing stop loss at 50,800

For existing short positions:.

Nifty intraday stop loss at 25,125 and closing stop loss at 25,050 Nifty Bank intraday and closing stop loss at 51,350

For new positions in nifty50:.

The best range to buy Nifty is 24,850-24,950 with a stop loss at 24,750 for targets of 25,000, 25,040, 25,075; above 25,125, one may hold their long positions with a trailing stop loss No fresh sell trigger in Nifty; for those who still want to sell, they may with a strict stop loss at 25,125

For new positions in nifty bank:.

The best range to buy Nifty Bank is 50,800-50,950 with a stop loss at 50,700 for targets of 51,050, 51,150, 51,250, 51,325 and 51,475 Aggressive traders sell Nifty Bank in the 51,325-51,475 range with a strict stop loss at 51,650 for targets of 51,250, 51,150, 51,075, 51,000, 50,950 and 50,850

Stocks in f&o ban.

New in ban: None Already in ban: Birlasoft, Aarti Industries, AB Fashion, India Cements, Chambal Fertilisers, IEX, RBL Bank, Balrampur Chini Out of ban: GNFC, Granules India, Hindustan Copper, NALCO, Sun TV

Stock of the day | indigo.

The market guru suggests selling IndiGo futures for targets of Rs 4,675 and Rs 4,620 with a stop loss at Rs 4,755.

Stock of the day | paytm.

The market guru suggests buying Paytm shares for targets of Rs 540 and Rs 550 with a stop loss at Rs 520.

Share market news august 27: infosys, vedanta, aurobindo pharma, glenmark pharma, ceigall, paytm, united drilling tools, other stocks to track on tuesday.

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Guest Essay

The Election Is in 10 Weeks. These 3 Things About the Polls Keep Me Up at Night.

An illustration that includes a photo of a hand picking up the handset of a rotary telephone.

By Kristen Soltis Anderson

Ms. Anderson, a contributing Opinion writer, is a Republican pollster and a moderator of Opinion’s series of focus groups.

Sunday night was an unexpectedly exciting time in the Anderson household: Just after dinnertime, my husband got called and asked to participate in an election poll. I was in the middle of getting my toddler ready for bed when he rushed into the room, holding our baby in one hand and his phone in the other, now on speaker so I could hear the questions.

There’s a real thrill you get as a pollster when you get to peek behind the curtain and see how someone else in your field is asking voters what they think. But it was also a reminder of how messy social science can be. Here was my husband, telling this very nice interviewer what he thought about, among other things, immigration and Tim Walz, all while pacing the hallway bouncing a bedtime-bound infant. I can only imagine what others are up to while answering survey questions.

As we near Election Day, Americans’ interest in polls will only increase. Election forecasting models are being heavily scrutinized and debated by commentators and reporters. Small shifts in polling results can trigger big headlines. As we start this post-Democratic convention week, when analysts will be combing for any hint of a bump for Kamala Harris, it’s worth keeping in mind that there are lots of things that make polling art as much as science.

Pollsters try to get it right, but we don’t know what we don’t know, and sometimes in our industry it can feel you’re fighting the last battle. In 2012 some pollsters missed the mark and overestimated Mitt Romney’s vote share, in part because they were excluding less-likely voters or not calling enough voters on cellphones. By 2016, those issues were largely addressed, but new problems reared their heads, like some pollsters overrepresenting college graduates in their surveys, yielding poll results that were overly favorable toward Hillary Clinton, particularly in key Upper Midwest states.

Four years after that, pollsters had mostly fixed the issues that plagued them in 2016, yet in 2020 many polls “ featured polling error of an unusual magnitude ,” according to the American Association for Public Opinion Research’s task force on the matter. The task force was circumspect in its report on what went wrong and didn’t propose a definitive solution. And troublingly, the industry did not come away with a clear conclusion as to what went wrong, so that it could be remedied.

As a pollster, I’ll be the first person to tell you that I have a measure of apprehension about the polls this year. I mentioned last week that a couple of warning lights are starting to blink on the 2024 polls. And so an accounting of a few things that keep me up at night:

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The EBA updates data used for the identification of global systemically important institutions (G-SIIs)

Press Release
27 August 2024
The publication covers 13 indicators used to measure systemic importance
This year’s publication includes, for the first time, one additional institution
The EBA data is published using user-friendly Excel and PowerBI tools, as well as bank-specific PDFs

The European Banking Authority (EBA) updated today the 13 systemic importance indicators and underlying data for the 33 largest institutions in the EU whose leverage ratio exposure measure exceeds EUR 200 bn. This publication includes updated numbers and data items specific to the recognition of the Banking Union and of institutions that are part of the Single Resolution Mechanism. Acting as a central data hub in the disclosure process, the EBA updates this data on a yearly basis and provides user-friendly tools to aggregate it across the EU.

This end-2023 data will assist competent authorities to identify a subset of banks as global systemically important institutions (G-SIIs), following the final decision by the Basel Committee on Banking Supervision (BCBS) and the Financial Stability Board (FSB).

A stable sample of 27 institutions shows that the sum for those banks’ total exposures increased by 1.3% at the end of 2023. The indicators for Securities Outstanding and Level 3 Assets increased by 14.9% and 12.6% respectively, both achieving the highest aggregate value since 2013. Assets under custody also observed a noticeable increase by 11.2%. The indicator for payments activity was the only one showing a decreasing trend (-3.7%) from 2022 to the end of 2023.

Background legal basis

The identification of a G-SII, which leads to higher capital buffer requirements, falls under the responsibility of national competent authorities. The identification is based on the disclosure of global denominators and G-SIB exercise results, which are expected to be published by the BCBS and the FSB in November each year. Any higher capital buffer requirements will then apply after about one year from the publication by competent authorities of bank-specific results and buffer rate allocation, thus allowing institutions enough time to adjust to the new buffer requirement. 

The EBA Guidelines on disclosure of G-SIIs , as amended by EBA/GL/2022/11, define uniform requirements for disclosing the values used during the identification and scoring process of G-SIIs, in line with the internationally agreed standards developed by the BCBS and the FSB. Having in mind the G-SIB assessment methodology review announced by the Basel Committee on the 31st of May 2022, the EBA supports the disclosure by EU authorities of the cross-jurisdictional indicators and underlying data items needed to calculate the parallel set of scores specific to European Banking Union banks.

To promote a level playing field in the EU and to increase transparency in the internal financial market, the current level of disclosure goes beyond the minimum standards required by the BCBS, both in terms of granularity of the disclosed information and applicable scope of institutions. Consequently, some of the group-specific templates currently published belong to institutions that have not contributed directly to the BCBS's G-SIB exercise.

The Regulatory Technical Standards (RTS) on the specification of the methodology for the identification and definition of subcategories of G-SIIs , and Guidelines on disclosure of G-SIIs have been developed in accordance with Directive 2013/36/EU (Capital Requirements Directive - CRD IV) on the basis of internationally agreed standards, such as the framework established by the BCBS and the FSB.

2023 G-SII data disclosure - summary and charts

(548.21 KB - PDF)

Bank Legal Entity Identifier (LEI) [xlsx]

(11.19 KB - Excel Spreadsheet)

2023 G-SII data disclosure tool

(9.01 MB - Excel Spreadsheet)

Press contacts

Franca Rosa Congiu

[email protected]
+33 1 86 52 7052
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Superintendent Adrienne A. Harris Secures $35 Million Settlement with Nordea for Significant Compliance Failures and Inadequate Diligence Over High-Risk Correspondent Banks

Settlement Follows Department’s Investigation into Bank’s Role Outlined in the Panama Papers Leak

New York Department of Financial Services (“DFS”) Superintendent Adrienne A. Harris announced today that Nordea Bank Abp (“Nordea” or the “Bank”) has agreed to pay $35 million in penalties as part of a Consent Order entered into with the New York State Department of Financial Services (the “Department”) for significant compliance failures with respect to Bank Secrecy Act/Anti-Money Laundering (“BSA/AML”) requirements and the Bank’s failure to conduct proper due diligence of its correspondent bank partners.

“International financial entities such as Nordea must safeguard against criminal activity in the global financial system, and for years Nordea failed in these respects,” said Superintendent Harris. “It is critical that such institutions maintain robust compliance programs and conduct proper due diligence of their customers and banking partners.”

In 2016, the Panama Papers leak exposed Nordea’s role in helping hundreds of its customers create tax-sheltered companies using offshore accounts. The activity at Nordea’s former branch in Vesterport, Denmark further implicated the Bank in the flow of illicit funds with entities connected to the Russian Laundromat, the Azerbaijani Laundromat, and the Hermitage Capital Allegations.

The Department’s subsequent investigation revealed that the Bank’s AML safeguards at its high-risk, former Baltic Branches, failed to adequately compensate for the increased risk level, leaving the Bank vulnerable to money laundering and the flow of suspicious transactions. Moreover, Nordea consistently failed to properly implement compliance initiatives, exposing the Bank to elevated financial crime risk. Compounding these weaknesses, the Bank formed relationships with high-risk banking partners, further exposing it to additional money laundering risks and making it possible for the Bank to facilitate financial crimes. The Department’s investigation additionally found that the Bank’s transaction monitoring system was inadequate, leading Nordea itself to acknowledge that its overall AML risk was “critical.”

The combination of deficient AML controls, an unsophisticated transaction monitoring apparatus, and a decentralized global compliance program created a set of circumstances that exposed Nordea’s financial channels to a high risk of criminal abuse. Nordea’s relationships with U.S. banks imported those risks to the New York financial system.

Read the Nordea Bank consent order .

Contact the Press Office

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Anil Singhvi Market Strategy: Zee Business Managing Editor Anil Singhvi expects support for the headline Nifty50 index to emerge at 24,875-24,950 levels and a strong buy zone at 24,775-24,825 levels on Tuesday, August 27. For the Nifty Bank, he expects support to come in at 50,925-51,050 levels and a buy zone at 50,700-50,850 levels.. He sees a higher zone for the headline index coming in at ...
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Essay on Bank: Origin, Meaning and Functions | Banking

Origin and Development of Bank:

Meaning and Definition of Bank:

Classification of Banks:

1. Commercial Banks:

2. Industrial Banks:

3. Exchange Banks:

4. Co-Operative Banks:

5. Land Mortgage Banks:

6. Central Bank:

7. Saving Banks:

8. Indigenous Banks:

9. Regional Rural Banks:

Functions of a Bank:

1. To Receive Deposits:

2. To Lend Money:

3. Agency Functions:

4. Other Functions:

Advantages or Importance of a Bank:

1. To Cultivate Habit of Saving:

3. Facility in Making Payments:

4. Collection of Cheques, etc.:

5. Securing Loans and Overdrafts:

6. To Provide Credit Information and Letter of Credit:

7. Safety of Valuable Articles:

8. Representation and Correspondence:

9. Sale and Purchase of Securities:

10. Other Services:

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Financial Literacy: What It Is, and Why It Is So Important To Teach Teens

What Is Financial Literacy?

The Bottom Line

Key Takeaways

Pitfalls of Illiteracy

Scope of Financial Literacy

Why Financial Literacy Matters

Millennials' Challenge

Benefits of Financial Literacy

Strategies to Improve Financial Literacy Skills

Create a Budget

Pay Yourself First

Pay Bills Promptly

Get Your Credit Report

Check Your Credit Score

Manage Debt

Invest in Your Future

Example of Financial Literacy

Why Is Financial Literacy Important?

How Do I Become Financially Literate?

What Are Some Popular Personal Budget Rules?

What Are the Principles of Financial Literacy?

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