A bank is a place where you can deposit your money and borrow money depending on your requirement. These organizations may also provide financial help like providing advisory for managing money or investments. Banks also deal with foreign exchanges. Foreign exchange is the process of converting one currency into another currency. It involves buying, selling, and trading different currencies in order to facilitate international trade and finance. Banks also offer safe deposit boxes that are usually referred to as lockers.
Banks have a main job is to get money from people who are looking to safely deposit their funds, put it all together and gather credit for lending, and lend it to people who need money. Thus, banks are like middlemen between people who put their money in the bank and people who borrow money from the bank.
There are four types of Banks in the Indian Financial market; they are
- Central Bank (RBI) While the Central Bank is one in number, it has 8 definite functions,
- Bank of Issue,
- Banker, Agent and Advisor to Government,
- Custodian of Cash Reserves,
- Custodian of Foreign Balances,
- Lender of Last Resort,
- Clearing House,
- Controller of Credit,
- Protection of Depositor’s Interest.
- Commercial Bank (SBI, HDFC, Bandhan Bank, Indian Bank, etc.) A commercial bank basically takes deposits from people and also lends money to others. Deposits are money that is saved or put into an account for safekeeping. These can be in the form of savings, current, or time deposits. Additionally, a commercial bank provides money to its customers through different means like loans, cash credit, overdrafts, and bill discounting.
- Cooperative Banks (Bharat Co-operative Bank, Saraswat Co-operative Bank, Janata Co-operative Bank, Shamrao Vithal Co-operative Bank (SVC Bank) etc.) Cooperative banks give loans and also take in money from people who save it. They are created to provide money for farming and related activities and to support small industries in villages and cottage areas. The National Bank for Agriculture and Rural Development (NABARD) has the highest authority over cooperative banks in India.
- Regional Rural Banks (Assam Gramin Vikash Bank, Baroda Gujarat Gramin Bank, Telangana Grameena Bank, APGVB, etc.)
Along with the types of banks, there are also Types of Banking depending on how you want to access the banking services
Physical Branch Banking:
A physical bank branch is a place where customers can talk to someone face-to-face about something very important, like money. It is important to stress how crucial that is, because you only understand how important it is when things go wrong.
Mobile banking is when you use your phone or tablet to check and handle your bank account and do different tasks related to your money. Many banks offer a mobile app that is secure and user-friendly. You can use it from any place, even if you are not at a bank or ATM. Public (SBI) and private banks (Bandhan Bank) have developed SBI Mobile banking and Bandhan Bank mobile banking applications respectively.
An ATM is a machine found at a bank or on its own that lets people do simple banking tasks without needing a bank employee’s assistance. ATMs are handy and simple to use with an easy-to-understand display.
Savings is the money that a person has earned but has not spent yet. It is the money left over after paying for household and personal expenses during a specific time period, like a month.
Putting money in a bank is an important part of taking care of your own money. By putting money in a bank, you can be ready for different things in the future, like getting married, going to school, buying or fixing up a home, or having money saved for emergencies.
What is EPF and why is it important?
The Employees’ Provident Fund Organization is a social security organization in India that takes care of retirement funds. It is managed by the Government’s Ministry of Labour and Employment. There is another organization called Employees’ State Insurance that looks after health insurance for employees.
If an employee earns Rs 15,000 or less per month, they must enroll in the EPF scheme as per the rules. If an employee earns more than Rs 15,000 per month, they can join the EPF scheme if both they and their employer agree with the permission of the Assistant PF commissioner.
The Employee Provident Fund, or EPF, is a type of savings plan for workers. The Provident Fund is a retirement savings program run by the government for the working employees of the company. Employees can save a portion of their money each month for their retirement. The objective of EPF is to:
- To give money to the family members of a worker if they die young.
- To give a type of protection and support to people who work in industries.
- To give support and financial assistance to people who have reached retirement age or are elderly.
- To make your deposits grow faster without any risk.
It helps you save money for a long time. You do not have to invest all your money at once. Money is taken out of the employee’s paycheck each month to save a lot of money over a long time till they retire. The EPFO website allows people to conduct an epfo establishment search to find details about if certain establishments are registered with EPFO.
Therefore, Banks are important financial organizations that offer different services like keeping your money safe, giving you loans, and helping you invest. By saving and making their money grow, people can be financially secure and achieve their long-term goals. Moreover, when people save money in banks, it helps the banks have more money to lend for things that can make more money, which helps the economy grow. But it is important for people to make smart choices with their money, decide on how much and where they want to invest it, while also considering things like how prices go up during inflation and how much money they can earn as returns and interest on their savings and investments to make the most out of it.