SOCIAL STUDY

CLASS UNIT
VIII 7

BANK
 BANK
A bank is a financial organization which deals with
deposits and other related services. It receives money
from those who want to save in the form of deposit
and it lends money to those who need it. Oxford
Dictionary defines a bank as an establishment for
custody of money which it pays out on customer’s
order.
The bank can earn profit in a various ways including
interest, transaction fees and financial advices.
“Banking Businesss” means the business of receiving
money from the general public on current or deposit
of saving or other similar account repayable on
demand and paying and collecting cheque.
 CHARACTERISTICS OF BANK
1) DEALINGG IN MONEY : Bank is a financiall institution which deals with other
people’s money i.e. money given by deposit.
2) INDIVI9DUAL/FIRM/COMPANY : A bank may be a person, firm or a company.
A banking company means a company which is in the business of banking.
3) Acceptance of deposit : A bank accepts money from the people in the form
of deposits which are usually repayable on demand or after the expiry of a
fixed period.
4) GIVING ADVANCE : A bank lends out money in the form of loan to those who
require it for different purpose.
5) PAYMENT AND WITHDRAWL : A bank provides easy payment and withdrawl
facility to its customers inn the form of cheques and drafts. It also brings
bank money in circulation. This money is in the fom of cheque, draft
6) AGENCY OF UTILITY SERVICES : A bank provides various banking facilities to
its customers. They include general and agency services.
 CHARACTERISTICS AND CATEGORIES OF BANK
Contd………
7) PROFIT AND SERVICE ORIENTATION : A bank is a profit seeking institution
having service oriented approach.
8) CONNECTING LINK : A bank acts as connecting link between borrowing and
lenders of money. Banks collect money from those who have surplus money
and give the same to those who are in need of money.

CATEGORIES OF BANK
There are four categories of banks and financial institutions
in Nepal which are Class 'A', Class 'B', Class 'C' and Class 'D'
institutions. Class 'A' refers to commercial banks, Class 'B' refers to
Development Banks, Class 'C' refers to Finance Companies and Class
'D' refers to Micro Finance Companies.
 FUNCTION OF BANK
1) It issues money in the form of banknotes and current accounts
subject to check or make payment at the customer’s order.

2) Bank acts as both collection and paying agents for customers.

3) Credit intermediation banks borrow and lend back-to-back on their

own account as middle man.

4) Bank lends money whenever a bank gives out a loan in a fractional

reserve banking system, a new sum of virtual money is credited.
 NEPAL RASTRA BANK AND BANIJYA BANK
NEPAL RASTRA BANK
Nepal Rastra Bank is the Bank off all
Banks. It works as the Bank tp the
Government and Banker’s Bank. It is
the guardian of all the banks. All
other bank need to follow the
instructions given by the Rastra Bank.
That is why, it is the authority to
regulate and control them. It is
established completely under the
ownership of Nepal Government with
the main function i.e. to issue notes
and coins but not to earn profit.
BANIJYA BANK
The Bank which performs all
kind of banking business such as
finance, trade and commerce is
known as commercial bank. Its
main objective is to earn profit.
It is the oldest banking system.
The modern Commercial Bank
collect deposits in the current
account and its function is to
provide loan to individuals and
the organization.
 ATM CARD, SMS BANKING. TYPES OF ACCOUNT
ATM CARD : ATM card is an electronic
card issued by a Bank or financial
institution to withdraw the cash.
SMS BANKING : SMS Banking service
is a form of Mobile Banking facilities
used by banks to send messages to
customer’s mobile phones using SMS
messaging, or a service provided by
them which enables the customers to
perform some financial transactions
using SMS.
TYPES OF ACCOUNT
1) SAVING ACCOUNT : Fund deposited in
bank for saving purpose and bank
provides some interest on it. Any time
fund can be deposited But only limited
money can be withdrawal.
2) CURRENT ACCOUNT : Fund deposited
and withdrawal any time. No interest
given on this account by bank.
3) FIXED ACCOUNT : Fund deposited for
certain period of time and withdrawal
after that period only. You can also take
loan on this account. Bank gives fixed
interest on it.
 ADVANTAGES
OF SAVING
1) Develops a habbit of
regular saving.
2) Gives security of property.
3) Help to earn interest.
4) Develop
entrepreneurship.
5) Creates an environment of
investment.
ATM
POSITIVE ASPECTS
1) Easy to carry and use.
2) Less chance of theft.
3) No need of carrying money
NEGATIVE ASPECTS
4) May not be useable in
remote areas.
5) ATM will not work in
network problem.
6) Chances of misuse.
 HOME WORK
1)Prepare a dialogue on the the
topic “ Importance of Banking
System.”
SAVE MONEY AND
MONEY WILL SAVE YOU.