What Is a Bank?

A bank is a financial institution that accepts deposits from the public and creates a demand
deposit while simultaneously making loans.[1] Lending activities can be directly performed by the
bank or indirectly through capital markets.
Because banks play an important role in financial stability and the economy of a country, most
jurisdictions exercise a high degree of regulation over banks. Most countries have
institutionalised a system known as fractional reserve banking, under which banks hold liquid
assets equal to only a portion of their current liabilities. In addition to other regulations intended
to ensure liquidity, banks are generally subject to minimum capital requirements based on an
international set of capital standards, the Basel Accords.
Banking in its modern sense evolved in the fourteenth century in the prosperous cities
of Renaissance Italy but in many ways functioned as a continuation of ideas and concepts
of credit and lending that had their roots in the ancient world. In the history of banking, a number
of banking dynasties – notably, the Medicis, the Fuggers, the Welsers, the Berenbergs, and
the Rothschilds – have played a central role over many centuries. The oldest existing retail
bank is Banca Monte dei Paschi di Siena (founded in 1472), while the oldest existing merchant
bank is Berenberg Bank (founded in 1590).

How Do Banks Make Money?

Banks generally make money by borrowing money from depositors and compensating them
with a certain interest rate. The banks will lend the money out to borrowers, charging the
borrowers a higher interest rate and profiting off the interest rate spread.

 Additionally, banks usually diversify their business mixes and generate money through
alternative financial services, including investment banking and wealth management.
However, broadly speaking, the money-generating business of banks can be broken down
into the following:

1. Interest income
2. Capital markets income
3. Fee-based income

4. Interest Income
5. Interest income is the primary way that most commercial banks make money. As
mentioned earlier, it is completed by taking money from depositors who do not
 need their money now. In return for depositing their money, depositors are
compensated with a certain interest rate and security for their funds
6.
7. Capital Markets-Related Income

Banks often provide capital markets services for corporations and investors. The capital
markets are essentially a marketplace that matches businesses that need capital to fund
growth or projects with investors with the capital and require a return on their capital.

Banks facilitate capital markets activities with several services, such as:

 Sales and trading services

 Underwriting services
 M&A advisory

Fee-Based Income

Banks also charge non-interest fees for their services. For example, if a depositor opens a
bank account, the bank may charge monthly account fees for keeping the account open.
Banks also charge fees for various other services and products that they provide. Some
examples are:

 Credit card fees

 Checking accounts
 Savings accounts
 Mutual fund revenue
 Investment management fees
 Custodian fees

Barter
In trade, barter (derived from baretor[1]) is a system of exchange in which participants in
a transaction directly exchange goods or services for other goods or services without using a medium of
exchange, such as money.[2] Economists distinguish barter from gift economies in many ways; barter, for
example, features immediate reciprocal exchange, not one delayed in time. Barter usually takes place on
a bilateral basis, but may be multilateral (if it is mediated through a trade exchange). In most developed
countries, barter usually exists parallel to monetary systems only to a very limited extent. Market actors
use barter as a replacement for money as the method of exchange in times of monetary crisis, such as
when currency becomes unstable (such as hyperinflation or a deflationary spiral) or simply unavailable for
conducting commerce.

No ethnographic studies have shown that any present or past society has used barter without any other
medium of exchange or measurement, and anthropologists have found no evidence that money emerged
from barter. They instead found that gift-giving (credit extended on a personal basis with an inter-personal
balance maintained over the long term) was the most usual means of exchange of goods and services.
Nevertheless, economists since the times of Adam Smith (1723–1790) often inaccurately imagined pre-
modern societies as examples to use the inefficiency of barter to explain the emergence of money, of
"the" economy, and hence of the discipline of economics itself.[3] [4][5]

Types of Banks
Retail banks deal specifically with retail consumers, though some global financial services
companies contain both retail and commercial banking divisions. These banks offer
services to the general public and are also called personal or general banking institutions.
Retail banks provide services such as checking and savings accounts, loan and mortgage
services, financing for automobiles, and short-term loans such as overdraft protection

Commercial or corporate banks  provide specialty services to their business clients, from
small business owners to large, corporate entities. Along with day-to-day business
banking, these banks also provide their clients with credit services, cash management,
commercial real estate services, employer services, and trade finance, among other
services.

Investment banks focus on providing corporate clients with complex services and financial
transactions such as underwriting and assisting with merger and acquisition (M&A)  activity.
As such, they are known primarily as financial intermediaries in most of these transactions.
Clients commonly range from large corporations, other financial institutions, pension funds,
governments, and hedge funds

RBI

The Reserve Bank of India, chiefly known as, RBI is India's central bank and regulatory

body responsible for regulation of the Indian banking system. It is under
the ownership of Ministry of Finance, Government of India. It is responsible for
the issue and supply of the Indian rupee. It also manages the country's main payment
systems and works to promote its economic development. Bharatiya Reserve Bank Note
Mudran is one of the specialised divisions of RBI through which it prints & mints Indian bank
notes and coins. RBI established the National Payments Corporation of India as one of its
specialised division to regulate the payment and settlement systems in India. Deposit Insurance
and Credit Guarantee Corporation was established by RBI as one of its specialised division for
the purpose of providing insurance of deposits and guaranteeing of credit facilities to all Indian
banks.Until the Monetary Policy Committee was established in 2016,[6] it also had full control
over monetary policy in the country.[7] It commenced its operations on 1 April 1935 in
accordance with the Reserve Bank of India Act, 1934.[8] The original share capital was divided
into shares of 100 each fully paid.[9] Following India's independence on 15 August 1947, the RBI
was nationalised on 1 January 1949.[10]
SBI

State Bank of India (SBI) is an Indian multinational public sector bank and financial

services statutory body headquartered in Mumbai, Maharashtra. SBI is the 43rd largest bank in
the world and ranked 221st in the Fortune Global 500 list of the world's biggest corporations of
2020, being the only Indian bank on the list.[6] It is a public sector bank and the largest bank in
India with a 23% market share by assets and a 25% share of the total loan and deposits market.
[7]
 It is also the fifth largest employer in India with nearly 250,000 employees.[8][9][10]The bank
descends from the Bank of Calcutta, founded in 1806 via the Imperial Bank of India, making
it the oldest commercial bank in the Indian Subcontinent. The Bank of Madras merged into the
other two presidency banks in British India, the Bank of Calcutta and the Bank of Bombay, to
form the Imperial Bank of India, which in turn became the State Bank of India in 1955.[11] Overall
the bank has been formed from the merger and acquisition of nearly twenty banks over the
course of its 200 year history.[12][13] The Government of India took control of the Imperial Bank of
India in 1955, with Reserve Bank of India (India's central bank) taking a 60% stake, renaming it
State Bank of India.

Merger of state bank of india

The chairman and managing directors (CMDs) of 10 public sector banks, which are on the
government’s merger list, will meet on September 4 in Mumbai to discuss the plan.The meeting,
anchored by the ministry of finance, will also be attended by the representatives of State Bank
of India and Bank of Baroda, which will share their experiences with mergers, two people
familiar with the development confirmed.In April this year, Vijaya Bank and Dena Bank got
merged with Bank of Baroda. In 2017, State Bank of India merged with itself five of its
associate banks -- State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of
Travancore, State Bank of Hyderabad, and State Bank of Patiala — along with Bharatiya Mahila
Bank.According to a senior banker, the banks which would be merged into four entities would
also hold separate meetings to chalk out a road map.

Steps to Open a Bank Account

Visit Bank Branch or Apply Online
This form requires you to fill personal details such as your name, permanent address,
date of birth, the names of parents or spouse, along with your signatures to commit to
basic terms and conditions of the bank.

Submit Documents of Proof for KYC

In the case of opening a new account, customers need to submit mandatory documents
such as an Aadhaar Card or PAN Card, and submit two recent photos of themselves.
Other documents of proof will vary from one bank to another. 

Wait for Bank to Assess Documents

Banks usually take one to two days for new account approvals. Once you’ve submitted
your documents, wait for the bank to reach out to you for verification or clarifications on
any errors they see in your KYC document submissions.

Collect Your Account Details, Debit Card and Internet Banking Details
Once the bank approves your account-opening documents by analyzing the proofs
submitted, new account opening is sanctioned and the bank issues you your bank
account number, along with a customer ID to enable online banking. Online banking is a
way to carry out banking transactions electronically using the internet, instead of making
in-person transactions at a physical bank branch.
You are also provided a debit card to start accessing your bank account and conducting
financial transactions. A debit card is a plastic card issued by your bank to enable you to
make payments using the card instead of paying in cash. 
As a mandatory requirement, you are expected to change your ATM pin by visiting a bank
ATM and selecting a new pin for your debit card. 
You are also provided a cheque book, which helps you sign cheques to transfer funds
from one bank account to another. Cheques are paper documents that instruct a bank to
carry out a fund transfer from one account to another on whose name the cheque is
issued. 

How to calculate interest in loan

Calculation

You can calculate your total interest by using this formula: Principal loan amount x
Interest rate x Time (aka Number of years in term) = Interest

For example, if you take out a five-year loan for $20,000 and the interest rate on the
loan is 5 percent, the simple interest formula works as follows:

 $20,000 x .05 x 5 = $5,000 in interest

Currency of india

The Indian rupee (symbol: ₹; code: INR) is the official currency of India. The rupee is

subdivided into 100 paise (singular: paisa), though as of 2019, coins of denomination of 1
rupee is the lowest value in use. The issuance of the currency is controlled by the Reserve
Bank of India. The Reserve Bank manages currency in India and derives its role in currency
management on the basis of the Reserve Bank of India Act, 1934.

 In 2010, a new rupee sign (₹) was officially adopted. It was derived from the combination of
the Devanagari consonant "र" (ra) and the Latin capital letter "R" without its vertical bar. The
parallel lines at the top (with white space between them) are said to make an allusion to the
tricolour Indian flag,[9] and also depict an equality sign that symbolises the nation's desire to
 reduce economic disparity. The first series of coins with the new rupee sign started in
circulation on 8 July 2011. Before this, India used "₨" and "Re" as the symbols for multiple
rupees and one rupee, respectively.
 On 8 November 2016, the Government of India announced the demonetisation of ₹500
and ₹1,000 banknotes[10][11] with effect from midnight of the same day, making these notes
invalid.[12] A newly redesigned series of ₹500 banknote, in addition to a new denomination
of ₹2,000 banknote is in circulation since 10 November 2016.[13][14]
 From 2017 to 2019 the remaining banknotes of the Mahatma Gandhi New Series were
released in denominations of ₹10, ₹20, ₹50, ₹100 and ₹200.[15][16] The ₹1,000 note has been
suspended.[17]

Cheque

A cheque, or check (American English; see spelling differences), is a document that

orders a bank (or credit union) to pay a specific amount of money from a person's
account to the person in whose name the cheque has been issued. The person writing
the cheque, known as the drawer, has a transaction banking account (often called a
current, cheque, chequing, checking, or share draft account) where the money is held.
The drawer writes various details including the monetary amount, date, and a payee on
the cheque, and signs it, ordering their bank, known as the drawee, to pay the amount
of money stated to the payee.
Although forms of cheques have been in use since ancient times and at least since the
9th century, they became a highly popular non-cash method for
making payments during the 20th century and usage of cheques peaked. By the second
half of the 20th century, as cheque processing became automated, billions of cheques
were issued annually; these volumes peaked in or around the early 1990s. [1] Since then
cheque usage has fallen, being partly replaced by electronic payment systems. In an
increasing number of countries cheques have either become a marginal payment
system or have been completely phased out.
ATM
An automated teller machine (ATM) or cash machine (in British English) is an
electronic telecommunications device that enables customers of financial institutions to
perform financial transactions, such as cash withdrawals, deposits, funds transfers, balance
inquiries or account information inquiries, at any time and without the need for direct interaction
with bank staff.
ATMs are known by a variety of names, including automatic teller machine (ATM) in the United
States[1][2][3] (sometimes redundantly as "ATM machine"). In Canada, the term automated banking
machine (ABM) is also used,[4][5] although ATM is also very commonly used in Canada, with
many Canadian organizations using ATM over ABM.[6][7][8] In British English, the
terms cashpoint, cash machine and hole in the wall are most widely used.[9] Other terms
include any time money, cashline, tyme machine, cash dispenser, cash corner, bankomat,
or bancomat. ATMs that are not operated by a financial institution are known as "white-label"
ATMs.
Using an ATM, customers can access their bank deposit or credit accounts in order to make a
variety of financial transactions, most notably cash withdrawals and balance checking, as well
as transferring credit to and from mobile phones. ATMs can also be used to withdraw cash in a
foreign country.
ADVANTAGES OF ATM
Provide Convenience To Customers
Customers are able to do financial transactions conveniently with the use of ATMs. They can
avail various banking services and can do payments seating at their home comfort. Various
payments for online shopping, at restaurants and various other places payment can be made
using ATM. Nowadays ATM are installed at all important places like railway station, airports,
hospitals etc. which facilitate the people in withdrawing their money whenever they want.

Offer 24×7 Service

ATMs provides 24 hours a day, 7 days a week and 365 days a year to all its customers. Unlike
bank branches, it does not have any time schedule for its operations. Customers can access their
bank accounts and withdraw their money at any time of day or night as per their convenience.

Reduce Banks Workload

ATMs have an efficient role in reducing the workload of the banking industry. It has relieved
customers as they can avail various banking services by using ATM without visiting the bank
branches. Customers are not required to stand in long queues and fill up various forms for
availing basic withdrawal and deposit facilities. It helps in reducing the work pressure on bank
staff and provides flexibility to its operations.

Access To Bank Account From Anywhere

Account can be accessed by customer using ATM from any part of the country or even
worldwide. ATM machines are installed in different parts of the country at all convenient places.
Customers don’t need to carry cash while travelling and they can easily withdraw money any
place they are travelling.

Minimizes Transactions Cost

ATM has reduced the manpower need as all transactions are processed and monitored using
automated computerized systems. There is less human intervention in work operations which
reduce overall cost.

Disadvantages of ATM
Disadvantages of ATM

Charges Fees
Usage of ATMs by customers invites charging various fees for using it. Bank charges routines
charges as per their standard rates for providing them ATM facility. Customers are also required
to pay various tax while doing transactions online using the ATM.

Limitation On Cash Withdrawal

Bank imposes restrictions on withdrawal limit of their customers using ATM. There are
limitations on both no. of free transactions and the amount of money that can be withdrawn per
transactions. Banks set withdrawal amount limit for their customers. Most of the banks do not
allow withdrawal of more than 25,000 at a time.

Possibility Of Frauds
Customers performing online transactions using ATM are likely to be affected by various frauds.
There is a chance of stealing various account information by online hackers while doing online
transactions. These online hackers through various suspicious activities can get access to your
account and loot your money. 

Non-Reachable In Rural Areas

Banks in rural areas of our country have limited computerized branches and depends mainly on
manpower for its various operations. There are limited ATM machines installed in rural areas
which also do not operate properly. Therefore ATM services are not properly available in rural
areas. 

Types of money transfer

1. NEFT (National Electronic Fund Transfer)

Steps for a NEFT money transfer
Step 1: Go to Fund Transfer tab, and select 'Transfer to other bank' (NEFT)
Step 2: Select the recipient account and enter the relevant details
Step 3: Accept the (Terms and Conditions)
Step 4: Recheck the details, if all and complete the process

2. RTGS (Real Time Gross Settlement

Steps to make RTGS funds transfer:
Step 1: Go to Fund Transfer tab, and select 'Transfer to other bank' (RTGS)
Step 2: Select the recipient account and enter the relevant details
Step 3: Accept the (Terms and Conditions)
Step 4: Recheck the details, if all are correct, then confirm and complete the process

3. IMPS (Immediate Payment Service)

Steps to make IMPS money transfer:
Step 1:Using your Customer ID and Password into Net Banking/Mobile Banking
Step 2: Go to Funds Transfer tab (Other Bank Account)
Step 3: Select Debit / Credit Account, mode of transfer as IMPS and beneficiary
account
Step 4: Enter the amount to be transferred and click on Submit
Step 5: Click on the confirm button
Step 6: Recheck all the information and approve the transaction using OTP (one time
password) received on your registered mobile number
Step 7: And at last, confirm by clicking on the submit button.
1. UPI (Unified Payments Interface):
A Unified Payments Interface is a real-time payment system that allows transactions to
be done through any smartphone using VPA (Virtual Payment Address).
No bank account detail is needed for the money transfer through UPI. Only mobile
number or name is sufficient and the transactions can be done 24/7. UPI-enabled apps
allow the transfers up to Rs 1 lakh.

2. Cheque:
You can transfer money from your one account to another account by cheque. You
have to simply draw a stating payee as your name along with the account number
wherein you want to transfer the amount along with your signature.
It's done immediately at a branch if the transfer is within your bank.
There is no limit if you want to transfer money from your a/c to another bank a/c, but if
you want to withdraw a certain amount, there are restrictions.

Bank Establish Branch Re

Headquarters Total Assets Revenues
Name ed es f

₹1,010,325 ₹80,847
Axis Mumbai, Maharas
1993 4594 crore (US$130 bill crore (US$11 billio [23]

Bank htra
ion) n)

₹114,993 ₹14,633
Bandhan Kolkata, West
2015 1147 crore (US$15 billi crore (US$1.9 billio [24]

Bank Bengal
on) n)

₹23,337 ₹2,273
CSB
1920 Thrissur, Kerala 512 crore (US$3.1 billi crore (US$300 milli [25]

Bank
on) on)

City ₹53,311 ₹4,839

Kumbakonam, Ta
Union 1904 702 crore (US$7.0 billi crore (US$640 milli [26][27]

mil Nadu
Bank on) on)

₹39,602 ₹3,916
DCB Mumbai, Maharas
1930 352 crore (US$5.2 billi crore (US$510 milli [28]

Bank htra
on) on)
Bank Establish Branch Re
Headquarters Total Assets Revenues
Name ed es f

₹13,096 ₹1,072
Dhanlax
1927 Thrissur, Kerala 245 crore (US$1.7 billi crore (US$140 milli [29]

mi Bank
on) on)

₹204,966 ₹15,702
Federal
1931 Kochi, Kerala 1272 crore (US$27 billi crore (US$2.1 billio [30]

Bank
on) n)

₹1,799,506 ₹155,855
HDFC Mumbai, Maharas
1994 5608 crore (US$240 bill crore (US$20 billio [31]

Bank htra
ion) n)

₹1,573,812 ₹161,336
ICICI
1994 Vadodara, Gujarat 5266 crore (US$210 bill crore (US$21 billio [32][33]

Bank
ion) n)

₹298,652 ₹24,803
IDBI Mumbai, Maharas
1964 1884 crore (US$39 billi crore (US$3.3 billio [34][35]

Bank htra
on) n)

IDFC ₹163,071 ₹18,221

Mumbai, Maharas
First 2015 596 crore (US$21 billi crore (US$2.4 billio [36]

htra
Bank on) n)

₹362,903 ₹28,999
IndusInd Mumbai, Maharas
1994 2015 crore (US$48 billi crore (US$3.8 billio [37]

Bank htra
on) n)

Jammu
₹820.18 ₹71.66
& Srinagar, Jammu
1938 1,038 billion (US$11 billi billion (US$940 mill
Kashmir and Kashmir
on) ion)
Bank
Bank Establish Branch Re
Headquarters Total Assets Revenues
Name ed es f

₹85,580 ₹6,232
Karnatak Mangaluru, Karnat
1924 888 crore (US$11 billi crore (US$820 milli [38]

a Bank aka
on) on)

Karur ₹74,623 ₹5,470

Vysya 1916 Karur, Tamil Nadu 811 crore (US$9.8 billi crore (US$720 milli [39]

Bank on) on)

Kotak ₹478,872 ₹32,819

Mumbai, Maharas
Mahindr 2003 1604 crore (US$63 billi crore (US$4.3 billio [40]

htra
a Bank on) n)

₹8,438 ₹0,727
Nainital Nainital, Uttarakha
1922 160 crore (US$1.1 billi crore (US$95 millio [41]

Bank nd
on) n)

₹100,618 ₹8,561
RBL Mumbai, Maharas
1943 435 crore (US$13 billi crore (US$1.1 billio [42]

Bank htra
on) n)

South ₹94,149 ₹7,305

Indian 1929 Thrissur, Kerala 935 crore (US$12 billi crore (US$960 milli [43]

Bank on) on)

Tamilna
₹42,758 ₹3,992
d Thoothukudi, Tami
1921 509 crore (US$5.6 billi crore (US$520 milli [44]

Mercantil l Nadu
on) on)
e Bank

₹273,593 ₹20,039
Yes Mumbai, Maharas [45][46]

2004 1070 crore (US$36 billi crore (US$2.6 billio

Bank htra
on) n)
What do you mean by plastic money?

Cards are increasingly being used in place of actual cash. Plastic money refers to these
cards. Debit and credit cards represent plastic money. Plastic money has made it easier for
us to carry out transactions in our daily lives. It has replaced cash payments across the
world and established itself as a necessary form of instant money. It has made it simpler for
us to buy items with some of the best credit cards in the market, which we could not
otherwise afford.

Benefits of plastic money

Plastic money comes with many benefits, including:

1. Cashless living

Plastic money has not only made our lives easier but has also alleviated the hassles that
come with carrying currency. Some of the best credit cards allow us to move around the
world without worrying about carrying cash.

2. Better security

One advantage of using credit or debit cards is the decrease in robberies and crimes.
Hacking a card's PIN is difficult and necessitates the knowledge of certain procedures. As a
result, credit and debit cardholders can be reasonably confident of the security of their
funds.

3. Financial freedom

Credit cards allow a person to make a transaction and pay for it even when they do not
have the funds. It is incredibly beneficial especially when you are short on cash. Credit
cards also reduce the need to rely on others for financial assistance in an emergency. You
can use the credit card to fund your requirement and later payback in instalments. Further,
a credit card is easy to get. All you need to do is meet your bank’s credit card eligibility
criteria, and the card is yours.

4. Ease of doing transactions

Credit cards and debit cards can help make online payments, fund transfers, and other
transactions with ease. It is incredibly simple to make payments with plastic money from
any location. Furthermore, several online businesses provide discounts when paying using
credit and debit cards.

Drawbacks of plastic money

Plastic money also has some downsides, such as:

1. Does not work everywhere

There may be certain venues and stores where only cash is accepted. For example, buying
products from a small merchant or buying vegetables or newspapers.

2. Can land you in debt

If a person is not careful with plastic money, they can often overstep their spending limit and
spend more than they can repay. This can land them in debt.

If you are in the market for credit and debit cards and want to transition from cash to plastic
money, look no further than IDFC FIRST Bank. You will receive unsurmountable benefits if
you use cards from IDFC FIRST Bank. From unlimited lounge access to huge discounts,
the world is your playing field with IDFC FIRST Bank. So, wait no more; get your card from
IDFC FIRST Bank today! Use our mobile banking apps to unlock the benefits of our
manifold cards.