Define Bank and Explain various types of  bank deposits

Define of Bank - 

The term ' Bank ' has been defined in different ways by different economists. 

 According to Walter Leaf , " A bank is a person or corporation which holds itself out to receive from the public , deposits payable on demand by cheque . " Horace White has defined a bank , " as a manufacture of credit and a machine for facilitating exchange . "

 Bank Deposite Accounts : 

1. Fixed Deposit Account :

 Fixed deposits are made for a fixed time period and cannot be withdrawn before the expiry of the period , e.g. , one year , three years , five book or years and so on . A fixed deposit is also known as a time deposit or long - term deposit . A higher rate of interest is payable on a fixed deposit . No pass cheque book is issued to the deposit holder . Only a receipt containing the name and address of the depositor , the amount and period of deposit etc , is issued . The depositor can withdraw the money along with the interest on maturity date . 

2. Savings Deposit Account : 

Any person can open a Savings Deposit Account with the minimum specified amount . In this account , small savings are deposited by middle and low income people . Deposits can be made any number of times in a week . But there is a restriction on the number of withdrawals in a week . Interest is allowed on the minimum balance standing to the credit during a month . A book and a cheque book are issued to the account holder .The main purpose of savings deposit account is to develop the habit of savings among public . A savings bank account can be opened by two persons in their joint names . No overdraft is allowed on a savings account .

 3. Recurring Deposits Account :

 In this account , the account holder is required to deposit a specific amount every month . After the expiry of the specific period , the depositor gets back his deposits money together with interest thereon . The number of instalments may vary from 12 to 72. A pass book is issued to the depositor but no cheque book is issued .  

4. Current Account : 

Current Account is generally opened by business firms . Money can be deposited into and withdrawn from this account any ' number of times . Pass book , cheque book and overdraft facilities are available on a current account . Bank pays no interest but makes a small charge on current account .

 Bank classified in India 

Group Reserve Bank of India ( RBI ) The country had no central bank prior to the establishment of the RBI . The RBI is the supreme monetary and banking authority in the country and controls the banking system in India . It is called the ' Reserve Bank ' as it keeps the reserves of all commercial banks .

Structure of india Banking system -The banking system in India can be classified as given below :

Commercial Bank

Commercial banks mobilise savings of general public and make them available to large and small industrial and trading units mainly for working capital requirements .with a few foreign banks . The public sector banks account for more than 92 percent Commercial banks in India are largely Indian public sector and private sector of the entire banking business in India - occupying a dominant position in the commercial banking . The State Bank of India and its 7 associate banks along with another 19 banks are the public sector banks .

 Regional Rural Bank :The Regional Rural Banks ( RRB ) , the newest form of banks , came into existence in the middle of 1970s ( sponsored by individual nationalised commercial banks ) with the objective of developing rural economy by providing credit and deposit facilities for agriculture and other productive activities of all kinds in rural areas . The emphasis is on providing such facilities to small and marginal farmers , agricultural labourers , rural artisans and other small entrepreneurs in rural areas . 

Other special features of these banks are : 

( i ) .their area of operation is limited to a specified region , comprising one or more districts in any state ; 

( ii ) their lending rates cannot be higher than the prevailing lending rates of cooperative credit societies in any particular state , 

( iii ) the paid - up capital of each rural bank is 25 lakh , 50 percent of which has been contributed by the Central Government , 15 percent by State Government and 35 percent by sponsoring public sector commercial banks which are also responsible for actual setting up of the RRB. 

Cooperative Banks :

 Cooperative banks are so - called because they are organised under the provisions of the Cooperative Credit Societies Act of the states .  The major beneficiary of the Cooperative Banking is the agricultural sector in particular and the rural sector in general . 

The cooperative credit institutions operating in the country are mainly of two kinds : agricultural ( dominant ) and non - agricultural . There are two separate cooperative agencies for the provision of agricultural credit : one for short and medium - term credit , and the other for long - term credit . The former has three tier and federal structure . 

At the apex is the State Co - operative Bank ( SCB ) ( cooperation being a state subject in India ) , at the intermediate ( district ) level are the Central Cooperative Banks( CBS ) and at the village level are Primary Agricultural Credit Societies ( PACS ) . 

Long - term agriculture credit is provided by the Land Development Banks . The funds of the RBI meant for the agriculture sector actually pass through SCB and CCB. Originally based in rural sector , the cooperative credit movement has now spread to urban areas also and there are many urban cooperative banks coming under SCB.