Bank

What is Bank, its works & types: Bank is a financial institution which accepts deposits from public & creates credit.

Banks act as payment agents by conducting checking or current accounts for customers, paying cheques drawn by customers on the bank, and collecting cheques deposited to customers' current accounts. Banks also enable customer payments via other payment methods such as Automated Clearing House (ACH), Wire transfers or telegraphic transfer, EFTPOS, and automated teller machines (ATMs).

Banks offer many different channels to access their banking and other services:

1. Automated teller machines (ATM)
2. A branch in a retail location
3. Call centre
4. Mail: most banks accept cheque deposits via mail and use mail to communicate to their customers, e.g. by sending out statements
5. Mobile banking is a method of using one's mobile phone to conduct banking transactions
6. Online banking is a term used for performing multiple transactions, payments etc. over the Internet
7. Relationship managers, mostly for private banking or business banking, often visiting customers at their homes or businesses
8. Telephone banking is a service which allows its customers to conduct transactions over the telephone with automated attendant, or when requested, with telephone operator
9. Video banking is a term used for performing banking transactions or professional banking consultations via a remote video and audio connection. Video banking can be performed via purpose built banking transaction machines (similar to an ATM), or via a video conference enabled bank branch clarification
10. DSA (Direct Selling Agent), who works for the bank based on a contract & has to increase the customer base for the bank.

A bank can generate revenue by different ways

• Interest,
• Transaction fees and
• Financial advice.

Traditionally, the most significant method is via charging interest on the capital it lends out to customers. The bank profits from the difference between the level of interest it pays for deposits and other sources of funds, and the level of interest it charges in its lending activities.

The Indian banking sector is broadly classified into scheduled banks and non-scheduled banks. All banks included in the Second Schedule to the Reserve Bank of India Act, 1934 are Scheduled Banks.

Classification of Banks in India-