What is the definition of a Bank?
Definition of Bank Bank is a financial institution or corporation which deals with money and its substitutes; it also provides other financial services. Banks accept deposits and make loans and obtain a profit from the difference in the interest paid to lenders (depositors) and charged to borrowers, respectively.
It is formed for the purposes of maintaining current accounts, savings accounts and checking accounts, issuing loans or advances or investment (Islamic mode) and credit, and dealing in negotiable securities issued by governmental entities and corporations.It makes a link with depositors and customers directly or indirectly.
“A bank is a dealer in debts- his own and other peoples”- G. Crowther.
“Bank is an economic institution whose main aim is to earn profit through exchange of money and credit instrument” – Jhon Harry.
“A bank is an institution,the principal function of which is collect the unutilized money of the people and to lend it to others.” –R.P. Kent.
“Banks are institutions whose debts are commonly accepted in settlement of other people’s debts.” –R.S. Sayers.
“A bank is a financial intermediary- a dealer in loans and debts” -Cairncross.
“A bank is an establishment which trades in money, an establishment for deposit, custody and issue of money and also for granting loans and discounting bills and facilitating transmission of remittances from one place to another.”-
English Version of Dictionary Definitions
1) “ A bank is an organization chartered by the state or federal govt. principal functions of which are :
i) To receive demand deposits and pay customers cheques drawn against them.
ii) To pay time deposits and pay interest thereon.
iii) To discount notes, make loans and invest in govt. or other securities.
iv) To collect cheques, drafts, notes etc.
v) To issue drafts and cashier’s cheques.
vi) To certify depositors cheques.
vii) When authorized by the chartering govt. it may act in a fiduciary capacity.
-Dictionary of Banking and Finance.
2) “ Bank is an institution where money is received for custody and returned on demand.” – A.T. Deb.
3) “A bank is an institution for the custody and investment of money.
– Samsad Dictionary.
4) “A bank is an establishment which trades in money, an establishment for deposit, custody and issue of money and also for granting loans and discounting bills and facilitating transmission of remittances from one place to another.”–Imperial Dictionary
1) “ A commercial banker is a dealer in money in substitutes for money, such as cheques or bill of exchange.”- New Encyclopedia Britanica.
2) “ Establishment for custody of money, which it pays out on customers order” – The New Oxford Encyclopedic Dictionary.
3) “ Commercial banks usually just called banks, can be defined as institutions that provide checking accounts to the public and have substantial proportion of their assets invested in loans and general business firms.”
– The Macmillan Family Encyclopedia
– Lexicon Universal Encyclopedia.
4) “Primarily business of dealing in money and instrument of credit.”
– New Illustrated Columbia Encyclopedia.
5) “ An establishment receiving money for the purpose of being lent out on interest or returned by exchange or disposed of the profit of to be drawn out again as the owner require it” – The new Caxton Encyclopedia.
Some Definitions of Banks as provided by Acts and Ordinances
1) “ Banker includes a body of person, whether incorporated or not, who carry on the business of banking”-English Bills of Exchange Act-1982
2) “ A bank , it implied, is an instrument of society having functions what make it, in effect, a financial reserviour receiving streams of currency from any direction and from which their issue out following streams where and as required to sustain and fructify or assist commercial, industrial or other enterprises or ventures.”- High court of Australia.
3) “ A bank is a person or corporation carrying on bonafide banking business.” – English Finance Act, 1915
4) “ Banker includes a person, or corporation, or a company acting as banker” – Negotiable Instrument Act, 1881
Some Definitions of Banks as provided by Banking Institutes
1) “ A bank performs an essentially distributive task, service or acts as an intermediary between borrowers and lender sense, however, a bank can be considered the heart of a complex financial structure.” – American Institute of Banking.
2) “ Stated very simple, banks deals in money and in that connection offer certain related financial services.” – Harold Wallgren for American Bankers Association.