What is a Bank?

In ancient times people, of Florence (Italy), used to transact over the table, and
they called it BANCO (or Bench) as per popular belief.
However in simpler terms if we define bank, it is an organisation which accepts
deposits and grants advances.
OR
An organisation which acts as a bridge between sources of funds and scarcity
of funds.
OR
A business activity involving accepting deposits and safeguarding them, at the
same time, lending the same deposits in the form of loans or advances, in order
to earn profits.
What is Banking system?
In any country, banking system means to establish money supply system and
at the same time to control the same.

The definitions above gives only the basic activities, but in todays competitive
world the gamut of activities, performed by a bank, has widened. Lets see some
more details.

Types of Commercial Banking

Branch Banking:
The most common baking term in which to increase a banks geographical reach
number of branches are opened in various parts of a city or a state or a region or
a country. However these branches act as subordinate branches of the banking
company and operate under the same name, ONLY the branch name changes
Unit Banking:
A simple ONE BRANCH banking facility, popular in the US, which, unlike Branch
Banking System, does not have branch network OR this system is opposite to
Branch Banking. However in India, a country scattered on all sides and with
different type of language, people and requirements, it cannot work. The
management can have good control, but at the same time growth potential
cannot be fully exploited.
Investment Banking:

This refers to banks whose main function is to provide finance for investment to
industrial concerns. They provide this by purchasing shares and debentures of
newly floated companies.
Mixed Banking:
Most banks in India play both roles. Deposit Banking and Investment Banking.
Such type of banking is called mixed banking.