What Is a Bank?

A bank is a lawful organisation that accepts deposits that can be withdrawn on demand.
Banks are institutions that help the public in the management of their finances, public
deposit their savings in banks with the assurance to withdraw money from the deposits
whenever required.
Banks accept deposits from the general public and from the business community as
well and give two assurances to the depositors –

1. Safety of deposit
2. Withdrawal of deposit, whenever needed
Important Functions of Bank
There are two types of functions of banks:

1. Primary functions – being primary are also called banking functions.

2. Secondary Functions
Both the types of functions of bank are explained below in detail:
Primary Functions of Bank
All banks have to perform two major primary functions namely:

1. Accepting of deposits
2. Granting of loans and advances

Types OF BANK ACCount

Savings Account
As the name suggests, the savings accounts can be opened by an individual or jointly
by two people with an aim to save money.
The main benefit of opening a savings bank account is that the bank pays you interest
for opening this type of account with them.
Given below are a few features of the Savings account:

 There is no limit to the number of times the account holder can deposit money in
this account but there is a restriction on the number of times money can be
withdrawn from this account.
 The rate of interest that an account holder get varies from 4% to 6% per annum
 There is no minimum balance that needs to be maintained for this type of an
account
Current Account
The second type of bank account is the current bank account. These accounts are not
used for the purpose of savings.
Some important pointers related to the current bank account have been discussed
below:

 This type of bank account is mostly opened by businessmen. Associations,

Institutions, Companies, Religious Institutions and other business-related works,
the current account can be opened
 There is no fixed number of times that money can either be deposited or
withdrawn from such accounts
 Internet banking is available
Recurring Deposit Account
Recurring Deposit account or RD account is a form of account wherein the account
holder needs to deposit a fixed amount every month until it reaches the fixed maturity
date.
The features of the Recurring deposit account have been discussed below:

 Any individual or an Institution can open a recurring deposit account either

separately or jointly
 Periodic or monthly instalments that need to be added can be as low as Rs.50/-
or may vary from bank to bank
 The range of months for which an RD account can be opened varies from 6
months to 120 months
Fixed Deposit Account
FD or a fixed deposit account is another type of bank account that can be opened in any
Public or Private sector bank.
The list of important things that need to be known with respect to the fixed deposit
account has been mentioned below:

 It is a one time deposit and one time take away account. Under this type of
account, the account holder needs to deposit a fixed amount of sum (as per their
wish) for a fixed time period
 The amount deposited in FD account can only be withdrawn all at once and not
in instalments
 Banks pay interest on the fixed deposit account

What Is Online Banking?

Online banking allows you to conduct financial transactions via the Internet.
Online banking is also known as Internet banking or web banking.

Online banking offers customers almost every service traditionally available

through a local branch including deposits, transfers, and online bill payments.
Virtually every banking institution has some form of online banking you can
access through a computer or app.
What is the account information?

Access to account information is an online service that gives you insight into a client’s
finances up to several years back and up to 90 days upfront – all with the client’s
consent.

It provides you with data like the: current account balance, oldest transaction date,
currency and the account holder, as well as each transaction including title,
sender/receiver, date, amount and much more. We can provide you with details not only
about one account, but all accounts the user has given us access to.

Funds Transfer - An Introduction

A Funds Transfer is a sequence of events that results in the movement of funds from the remitter to
the beneficiary. It is also defined as the remittance of funds from one party to itself or to another
party through the banking system. It is an essential support function for other financial products such
as loan repayment, settlement of trade bills etc., apart from being an important stand-alone function
in a typical bank.

Classifying Funds Transfers

Funds Transfers can be classified as Incoming, Outgoing or Internal depending on the direction of
flow of funds in the transfer. Incoming or Outgoing transfers are indicative of whether funds are
coming in or going out of the bank. Internal transfers indicate funds being transferred within the bank
itself (between two accounts within the Bank). No other financial institution is involved in such
transfers. Based on the parties involved in the transfer, Funds Transfers can also be classified as
customer transfer, bank transfer and bank transfer for own account.

Customer Transfer: A customer transfer is a transfer in which either the ordering customer or the
beneficiary customer, or both, are non-financial institutions, i.e. at least one party in the chain is not
a financial institution.

Bank Transfer: A bank transfer refers to the transfer of funds between the ordering institution and
beneficiary institution. Here the originator and beneficiary and all intermediary parties are financial
institutions.

Bank Transfer for Own Account: A transfer initiated by a bank to transfer funds from one of its
accounts (held in one Bank) to another account (held in another Bank).

Security Measures
Security in banking refers to the measures taken by banks and financial institutions to
protect customer information, accounts, and funds from unauthorized access or
misuse. It encompasses a range of technologies, processes, and procedures designed
to detect and prevent fraud while ensuring customers receive reliable services. Security
measures may include encrypting data when it is transmitted online; using multi-factor
authentication for online banking accounts; implementing strong passwords;
monitoring network activity for suspicious transactions; conducting regular security
audits of third-party vendors; training employees on security protocols; and utilizing
biometric authentication methods such as fingerprint scanning or facial recognition.
Additionally, banks may also employ physical security measures such as CCTV
surveillance systems to monitor their premises. The goal of these measures is to
ensure that financial institutions remain secure from risk of cyberattacks from hackers
or other malicious actors.

The Benefits of Saving Money

Saving provides a financial “backstop” for life’s uncertainties and increases feelings of security
and peace of mind. Once an adequate emergency fund is established, savings can also provide
the “seed money” for higher-yielding investments such as stocks, bonds, and mutual funds.

CONCLUSION

Banking sector in Indian has given a positive and encouraging responses to the financial sector
reforms. Entry of new private banks and shaken up Public sector banks to competition. The
financial sector reforms have brought India financial system closer to global standards.