The Banking System

A bank is a financial institution that provides banking and other financial services. It is an institution that hold a banking lisence.

A bank is an institution with two fold functions. First, it keeps people's money safe and readily available. In this way, it functioned as a saving bank. Second, it lends money to people who need it. It also, therefore, a money lender.
People can go to bank and deposit money. They become customers of the bank and will have to open bank accounts. The first is a current account, they can make withdrawals by means of a cheque. No interest would paid on this type of account. The other kind of the account is a time deposit. On this type of account, the customers can deposit their money for a specified period of time. They can withdraws the money only at a maturity date. Interest is paid for this kind of account.
A bank receives deposits from customers, as well as lends money to them. Customer who want to borrow money have to give the bank something, as collateral for a stance, a certificate showing ownership of properties. And when customer have a bank loan, the bank charges them some interests on the money they have been borrowed.

Osy Grasiani Ozella XI IA 6