2. Banking in its modern sense evolved in the
14th century in the prosperous cities of
Renaissance Italy but in many ways was a
continuation of ideas and concepts of credit
and lending that had their roots in the
ancient world
Banking can be defined as the business
activity of accepting and safeguarding
money owned by other individuals and
entities, and then lending out this money in
order to earn a profit. However, with the
passage of time, the activities covered by
banking business have widened
3.
4. Any company, which transacts the
business of banking defined above is
termed as Banking company
Bank is a financial institution that
undertakes the banking activity ie.it
accepts deposits and then lends the
same to earn certain profit.
27. Branch banking involves business of banking via
branches.
Chain banking system refers to the type of
banking when a group of persons come together
to own and control three or more independently
chartered banks.
Retail banking means banking where
transactions are held directly with customers and
there are no transactions with other banks or
corporations.
Wholesale banking involves banking services for
high net-worth clients like corporate, commercial
banks, mid-size companies etc.
28. Mixed Banking is the system in which banks
undertake activities of commercial and investment
banking together.
Relationship banking is a banking system in
which banks make deliberate efforts to
understand customer needs and offer him
products accordingly
Unit banking is a system of banking which originated in
US. It is a limited way of banking where banks operate
only from a single branch (or a few branches in the same
area) taking care of local community.
Social banking is a concept where banking services
are oriented towards mass welfare and financial
inclusion of the poor and vulnerable segments of
society.
29. Correspondent banking is a profitable way of
doing business by banks in foreign countries in
which they don’t have physical presence or limited
operational permissions.
Universal banking is a system of banking under
which big banks undertake a variety of banking
services like commercial banking, investment
banking, mutual funds, merchant banking,
insurance etc..
Virtual banking is performing all banking
operations online
Narrow Banking Narrow Banking involves
mobilizing the large part of the deposits in Risk
Free assets such as Government Securities.
30. Shadow banking refers to all the non-bank
financial intermediaries that provide services
similar to those of traditional commercial banks.
In the Indian financial arena, shadow banks term can be
used for Non-Banking Finance Companies (NBFCs).
Islamic banking is banking or banking activity that
is consistent with the principles of sharia and its
practical application through the development of
Islamic economics.
31. Range of activities
Activities undertaken by banks include
personal banking, corporate banking,
investment banking, private banking,
transaction banking, insurance, consumer
finance, foreign exchange trading,
commodity trading, trading in equities,
futures and options trading and money
market trading.
