Banking operations

Meaning of bank
Functions of bank
Credit card
ATM cards
Parts of ATM
Debit card

1. Banking Operations

2. Meaning Of Bank There is no unanimous opinion about the origin of the term ‘bank’. According to the opinions of some experts, the origin of bank’ is traced to a latin word bancus ’ which means a bench’. According to the opinions expressed by other experts, the word ‘bank’ was originally derived from the German word bankon ’. Bankon ’ refers to ‘joint stock fund’. This word Italianized into ‘ banco ’ by the German and was again changed into bank ‘by the French. Later on the British people converted this word into bank.

3. Meaning And Definition of the word‘Bank ’ A bank is a financial institution that accepts deposits from the public and those deposits through loans and advances or invests on securities through financial market. Section5(a)of the banking Regulation Act ,1949, ‘a banking company as a company which transacts the business of banking’. According to Herbert L Hart, “The banker is a person or company carrying on the business receiving money and collection draft for customers subject to the obligation of honouring the cheques drawn upon him from time to time by customers upto the amount available on theircurrent accounts”.

4. Functions Of Banks Primary Secondary Borrowing Lending Current Loans Fixed Overdraft Savings Cash Credit Recurring Buying & discounting bills of exchange Agency Services General Utility Services Collection& payment behalf of customers Mail transfer Money transfer Safe deposit locker Buying & selling securities Safety of valuables Service-As trustees Latter of credit Executor& legal advisor Travelers cheques Collection of statistics Merchant bankingservice Lease finance Teller system Underwriting

5. Credit Cards “ Credit Card ’’. A credit card is the plastic card usually 3-1/8inches by 2-1/8inches is size.It is made of plastic, therefore it is popularity called plastic money. Bank Credit Cards A bank credit cards are issued by banking companies. These cards enable the card holders to buy goods and services with a credit line given by the banker and can withdraw a specified sum from correspondent banks/branches.

6. Particulars on the Credit Card *Full name of a customer *16 digit number *card validity date *VISA hollogram *card issuing bank name *Card holder’s signature *black magnetic strip Advantages of bank credit cards To card holders: 1) Relieves from the burden of carrying cash 2)Easy payment mode-payment by cash is riskier to all 3)Customer can get overdraft facility for 45 days without undue dealy by correspondent banks 4)Helpline facilities 24*7 to card holders for emergency services 5)Card can be used for identity purpose also.

7. Disadvantages to Card Holders (1)Cards induces the holders to purchase beyond their present income. (2)Interest rates on cash withdrawals is more when compared with other consumer loans. Advantages to Business Enterprises *Credit cards guarantees payment.Chances of bad debts are very rare.Lots of risk is involved in credit card busniess *Credit cards promote sales.They increase the purchasing power of card holders. *Business houses become popular,many times card issuing branches introduce or advertise traders to customers. Disadvantage to Business Enterprises *Credit cards are not suitable to petty traders

8. ATM Cards The full form of ATM is “Automated Teller Machine’’.Banks and financial institution have popularised ATM card services. The revolution in information and telecommunication technology has extended the scope of ATM business.ATM was introduced in the year 1956 and Barclays Bank of London was popularised ATM service. Advantages of ATM *24/7 service. *Save time & efforts. *ATM can be operated easily by every one. *Card holder’s business secrets can be easily maintained. *Card holders can get mini account statement to verify their transactions. * Withdrawls from other bank’s ATM centers are also permitted.

9. Parts Of ATM Card reader : The card reader captures the account information stored on the magnetic stripe on the back of an ATM card. 2) Keypad: It let card holder to inform the bank what type of transaction is required . Example: (cash withdraw, deposit balance) etc.. 3) Speaker: It provides the card holder with auditory or listening feedback when a key is pressed . 4) Display screen: It display each step the card holder has to perform and the result of each transaction instantly . 5) Receipt printer: It provides a printed receipt to the card holder.

10. Debit Cards A debit card is a payment card where the transaction amount is deducted directly from the card holders bank account upon authorisation . Advantages of Debit Cards * It easy to obtain debit cards . An account holder ( savings or current) is issued a debit card on request. *It relieves the card holders from the risk of carrying cash during travel. *Card holders can purchase goods and services without pre payment. *Card increase the purchasing capacity of card holders. *Debit card are useful to travelers, tourists and general public.

11. Disadvantages of debit card *Debit card do not allow grace period on purchase of goods and services. *Debit cards induces to purchase more. *Debit card holders charged with annual /services charges by banks . *Debit card service depends on the availability of electronic network service.