Banking is an industry that handles cash, credit, and other financial transactions. Banks provide a safe place to store extra cash and credit. They offer savings accounts, certificates of deposit, and checking accounts. Banks use these deposits to make loans.
Functions of Banking
The primary functions of Banking are as below:
Banks accepts deposits from the people. Deposits are the amount of money submitted by the public in the banks as saving and or for future use. People do many kinds deposits such as fixed deposit, recurring deposit, current deposit and saving deposit.
Granting loans and advances
Banks grants money to the individuals in the form of loans. Loans are lend to the people at a certain interest rate for a particular period of time. Banks also provide advances to their customers.
Banks also provides the services such as overdraft, bill of exchange, bill discounting and loans too.
Banking is assumed to be the growth liner for every country with some conventional ideas about socio-economic growth especially for a developing country like Bangladesh. In Bangladesh, banking is regulated by a draconian regulatory regime known as Bangladesh Bank (BB) the central bank of Bangladesh. Which also deals in issuing new banking licenses.
Long ago, when no public sector bank was listed so there was no pressure from investors to perform and the concept of customer care did not exist. The branch manager was just responding to collect the homage from corporate professionals and company promoters. Later RBI introduced new guidelines which allowed private sector banks as a part of financial sector reforms to provide efficient, competitive, and low-cost financial assistance by the use of modern technology.
After that, another era of banking started in Bangladesh with the entry of private sector banks that followed the basic tenets of transparency, integrity, customer-centric services in line with the banking policies regulated by Bangladesh Bank. With the passage of time, private sector banking gained supremacy over the public sector as they are more capable of delivering the best globally and works for the benefit of their customers and investors. It also increase the functions of banking. The booming banking industry in India is a product of both innovation and technology which is much talked about nowadays.
In Bangladesh, now banking is considered as a critical building block for cash management in all businesses who want to grab the opportunities that would arise at any point of time like mutual funds, insurance, property funds, and private equities, etc.