Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.www.funancialquest.com – Online Course Module  ...
Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.www.funancialquest.com                         ...
www.funancialquest.com        Module 2: The Story of Banking                                                              ...
www.funancialquest.com            Module 2: The Story of Banking                                                          ...
www.funancialquest.com                Module 2: The Story of Banking                                                      ...
www.funancialquest.com                         Module 2: The Story of Banking                                             ...
www.funancialquest.com                Module 2: The Story of Banking                                                      ...
www.funancialquest.com                         Module 2: The Story of Banking                                             ...
www.funancialquest.com                            Module 2: The Story of Banking                                          ...
www.funancialquest.com                Module 2: The Story of Banking                                                      ...
www.funancialquest.com                         Module 2: The Story of Banking                                             ...
www.funancialquest.com                Module 2: The Story of Banking                                                      ...
www.funancialquest.com                         Module 2: The Story of Banking                                             ...
www.funancialquest.com                          Module 2: The Story of Banking                                            ...
www.funancialquest.com                Module 2: The Story of Banking                                                      ...
www.funancialquest.com                         Module 2: The Story of Banking                                             ...
www.funancialquest.com                            Module 2: The Story of Banking                                          ...
www.funancialquest.com                Module 2: The Story of Banking                                                      ...
www.funancialquest.com                          Module 2: The Story of Banking                                            ...
www.funancialquest.com                Module 2: The Story of Banking                                                      ...
www.funancialquest.com                         Module 2: The Story of Banking                                             ...
www.funancialquest.com                         Module 2: The Story of Banking                                             ...
www.funancialquest.com                         Module 2: The Story of Banking                                             ...
www.funancialquest.com                Module 2: The Story of Banking                                                      ...
www.funancialquest.com                           Module 2: The Story of Banking                                           ...
www.funancialquest.com                           Module 2: The Story of Banking                                           ...
www.funancialquest.com                           Module 2: The Story of Banking                                           ...
www.funancialquest.com                                         Module 2: The Story of Banking                             ...
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Nse module2

  1. 1. Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.www.funancialquest.com – Online Course Module Online Course Module 2 www.funancialquest.com Vol. 1.1-4n4
  2. 2. Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.www.funancialquest.com Module 2 The Story of Banking Duration: 30 Mins Vol. 1.1-4n4
  3. 3. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.Contents•What is a Bank?•Origin of the word•History of Banking•Goldsmiths of London•Banking in India•Reserve Bank of India•Channels of Banking•Services offered in a Bank Vol. 1.1-4n4
  4. 4. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved. The Story of Banking Vol. 1.1-4n4
  5. 5. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.The Story of Banking •What is a Bank? •Origin of the word •History of Banking •Goldsmiths of London •Banking in India •Reserve Bank of India •Channels of Banking •Services offered in a Bank Vol. 1.1-4n4
  6. 6. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.What is a Bank?We have seen banks all around but what are they really?A bank is a financial institution that accepts money deposits and uses thosedeposits to lend money to others. A bank is the connection between customerswho have extra money and customers who need extra money.Banks charge interest when they lend money and pay interest to the depositors. Vol. 1.1-4n4
  7. 7. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.The Story of Banking •What is a Bank? •Origin of the word •History of Banking •Goldsmiths of London •Banking in India •Reserve Bank of India •Channels of Banking •Services offered in a Bank Vol. 1.1-4n4
  8. 8. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.Origin of the word.We have seen banks all around but what are they really?The word bank was borrowed from from Old Italian and German Language word,banc, which meant "bench". Benches were used as desks or exchange countersduring the Renaissance Period by Florentine bankers, who used to make theirtransactions atop these benches. Vol. 1.1-4n4
  9. 9. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.Origin of the word.The Indian ConnectionAnother possible origin of the word is from the Sanskrit words ( ) byaya(expense) and onka (calculation) = byaya-onka. This word still survives in Bangla,which is one of Sanskrits child languages. + = . Such expensecalculations were the biggest part of mathematical treatises written by Indianmathematicians as early as 500 B.C. Vol. 1.1-4n4
  10. 10. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.The Story of Banking •What is a Bank? •Origin of the word •History of Banking •Goldsmiths of London •Banking in India •Reserve Bank of India •Channels of Banking •Services offered in a Bank Vol. 1.1-4n4
  11. 11. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.The History of BankingHow it all Started…Wealth in the earlier days was deposited and kept in temples also calledthêsaurus (treasure houses), where it was assumed that the Gods wouldsafeguard it from theft. Thus, the Old Temples were the earliest forms of banksand were almost exclusively used by the rulers and kings.In ancient India there is evidence of Banking Activities taking place like loansfrom the Vedic period (Around 1000 BC). During the Buddhist period, there wasconsiderable use of these instruments. Merchants in large towns gave letters ofcredit to one another. Vol. 1.1-4n4
  12. 12. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.The Story of Banking •What is a Bank? •Origin of the word •History of Banking •Goldsmiths of London •Banking in India •Reserve Bank of India •Channels of Banking •Services offered in a Bank Vol. 1.1-4n4
  13. 13. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.The Goldsmiths of LondonHow a group of Artisans became early BankersLondon in the earlier days was the centre of global finance. The main bankers inLondon were originally Goldsmiths, who over the years had transformed frombeing simple artisans to depositories of Gold and Silver Holdings. Vol. 1.1-4n4
  14. 14. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.The Goldsmiths of LondonHow a group of Artisans became early BankersGoldsmiths had money that they had no immediate use for, and they began lendingit out at interest to merchants and governments. Finding more profits in Lendingbusiness, Goldsmiths began soliciting for more deposits and started offeringinterest to depositors. This became the basis for modern banking as we know it.The first bank in the world was established in Venice in 1157.After second world war, the banking system internationally was brought underBretton Woods system in 1944. It also led to the creation of two organizations, TheInternational Monetary Fund (IMF) and the World Bank. Vol. 1.1-4n4
  15. 15. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.The Story of Banking •What is a Bank? •Origin of the word •History of Banking •Goldsmiths of London •Banking in India •Reserve Bank of India •Channels of Banking •Services offered in a Bank Vol. 1.1-4n4
  16. 16. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.Banking in IndiaHow the Banks Started in IndiaBanking in India originated in the last decades first banks were The General Bankof India, which started in 1786, and Bank of Hindustan, which started in 1770The first entirely Indian joint stock bank was the Oudh Commercial Bank,established in 1881 in Faizabad. Vol. 1.1-4n4
  17. 17. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.Banking in IndiaHow the Banks Started in IndiaThe oldest bank in existence in India is the State Bank of India, which originated inthe Bank of Calcutta in June 1806, which almost immediately became the Bank ofBengal. This was one of the three presidency banks, the other two being the Bankof Bombay and the Bank of Madras, all three of which were established undercharters from the British East India Company. For many years the Presidencybanks acted as quasi-central banks, as did their successors. The three banksmerged in 1921 to form the Imperial Bank of India, which, upon Indiasindependence, became the State Bank of India in 1955. Vol. 1.1-4n4
  18. 18. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.The Story of Banking •What is a Bank? •Origin of the word •History of Banking •Goldsmiths of London •Banking in India •Reserve Bank of India •Channels of Banking •Services offered in a Bank Vol. 1.1-4n4
  19. 19. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.The Reserve Bank of IndiaWhat is the Importance of RBI in IndiaToday, all banks in India are regulated under the central bank which is called theReserve Bank of India (RBI). Among many rights enjoyed by RBI, the main are asfollows:-Bank of Issue: RBI has the sole right to issue bank notes of all denominations-Monetary Authority: RBI acts as the main monetary authority and functions as thebank for National and State Governments.-Regulator and Supervisor: RBI acts as the chief regulator of economic activitiesin India Vol. 1.1-4n4
  20. 20. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.The Story of Banking •What is a Bank? •Origin of the word •History of Banking •Goldsmiths of London •Banking in India •Reserve Bank of India •Channels of Banking •Services offered in a Bank Vol. 1.1-4n4
  21. 21. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.Channels of BankingThe different channels through which Banks provide their services.Banks today, offer many different channels to access their banking and otherservices:•Automated Teller Machines (ATM)•A Bank Branch•Call Center•Mail: Most banks accept cheque deposits via mail and use mail to communicateto their customers, e.g. by sending out statements Vol. 1.1-4n4
  22. 22. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.Channels of BankingThe different channels through which Banks provide their services.•Mobile banking is a method of using ones mobile phone to conduct bankingtransactions•Online banking is a term used for performing multiple transactions, paymentsetc. over the Internet•Relationship Managers, mostly for private banking or business banking, oftenvisiting customers at their homes or businesses Vol. 1.1-4n4
  23. 23. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.Channels of BankingThe different channels through which Banks provide their services.•Telephone banking is a service which allows its customers to performtransactions over the telephone with automated attendant or when requested withtelephone operator•Video banking is a term used for performing banking transactions or professionalbanking consultations via a remote video and audio connection. Video bankingcan be performed via purpose built banking transaction machines (similar to anAutomated teller machine), or via a video conference enabled bank branchclarification Vol. 1.1-4n4
  24. 24. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.The Story of Banking •What is a Bank? •Origin of the word •History of Banking •Goldsmiths of London •Banking in India •Reserve Bank of India •Channels of Banking •Services offered in a Bank Vol. 1.1-4n4
  25. 25. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.Services offered by a Bank •CURRENT ACCOUNT •SAVINGS ACCOUNT •CERTIFICATE OF DEPOSITSome of the services offered by a Bank include•Current Account: A bank account which allows for unlimited withdrawals anddeposits. This account does not earn interest. This type of account is generallyused by companies and business organisations.•Savings Account: A bank account where customers deposit their savings andearn interest on their deposits.•Certificate of Deposit (CD): A certificate from the bank which states that adeposit of a certain amount has been made. This document sometimes is used asa guarantee of payment in business transaction. Vol. 1.1-4n4
  26. 26. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.Services offered by a Bank •FIXED DEPOSITS •CREDIT CARDSome of the services offered by a Bank include•Fixed Deposits (FD): Fixed Deposit schemes let customers deposit a fixed amountmonthly (or weekly, quarterly). FD earns a higher interest, but depositors are notallowed to withdraw before a certain period of time agreed earlier (like one year).•Credit Card: A card which identifies the customer and her relationship with abank and lets her buy an Item on credit. The payment for the item purchased isdone by the Bank and the user is asked to return the money to the bank before adeadline. Credit cards are used extensively for online transactions. Vol. 1.1-4n4
  27. 27. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved.Services offered by a Bank •DEBIT CARD •PERSONAL LOANSome of the services offered by a Bank include•Debit card: A Debit card looks similar to a credit card and has similar functions.The difference being the cost of the item bought from a Debit Card is deductedfrom the customers bank account immediately. Generally, a debit card alsofunctions as an ATM Card.•Personal loan: A personal loan is an amount borrowed by individuals from a bankwhich has to be return within a certain period with an extra interest. Peoplegenerally take a personal loan to buy items of personal and home use like Cars,Jewellery etc. Vol. 1.1-4n4
  28. 28. www.funancialquest.com Module 2: The Story of Banking Copyright © 2012 National Stock Exchange of India Ltd. All rights reserved. -End of Module 2- When ready, test your knowledge and receive a score! Note: The test contains 10 Objective Type Questions to be finished in 10 mins duration. For more interesting updates and information, visit us on www.facebook.com/funancialquest Vol. 1.1-4n4

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