Banks are defined as entities authorized by the Central Bank's Monetary Board to engage in lending funds obtained through deposit accounts. They have four main functions: 1) Depository function, which involves holding deposits for individuals and businesses in accounts like savings, checking, money market, and certificates of deposit. 2) Trust function, where they manage assets for trustors and distribute them to beneficiaries. 3) Collection and remittance of checks, payments, and funds for customers and take a fee for these services. 4) Making loans and providing credit to individuals and businesses, as well as discounting financial instruments.

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Introduction to Banks
BSP and the Philippine Financial System (cont’d)
Functions of a Bank

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Definition of Bank
 According to the General Banking Act, the term bank refers to
an entity duly authorized by the Monetary Board of the Central
Bank that may engage in the lending of funds obtained from the
public through the receipts of deposits of any kind and all
entities regularly conducting such operations.

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Functions of a Bank
• Depository Function
• Trust Function
• Collection and Remittance Function
• Loans and Discount Function

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Depository Function
Deposits may come in the form of cash, money orders and items for
collection.
Types of Bank Accounts:
The Single-Name Individual Account
Joint Account (Joint “and” & Joint “Or”)
Sole Proprietorship Account
Partnership Account
Corporate Account
Inactive Deposit Account
Insurance on Deposits; Republic Act No. 3591; the establishment of
PDIC

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Trust Function
A bank engaged in trust business undertakes an activity that results to a
trustor-trustee relationship.
Trustor – the person who holds legal title to the funds/property
Beneficiary – the person whose benefit a trust
Trustee – who manages the property entrusted

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Collection and Remittance Function
Act as collection agent an in return for its services rendered, the bank collects
a service fee from its clients.
Loans and Discount Function
Extension of Loans