Definition of money:

Money is a medium of exchange that people use to buy goods

and services. It's a form of currency that represents value and
allows for transactions. Money can come in various forms, such
as coins, banknotes, or digital currency. It's a way for people to
trade and participate in the economy.
In short, money can be anything that can serve as a store of
value, which means people can save it and use it later.

Definition of bank:
The term "bank" refers to a financial institution that provides
various services related to money. Banks typically offer services
such as accepting deposits, providing loans, facilitating
transactions, and offering other financial products like credit
cards and investment opportunities.
According to W. Hock;
“ Bank is such an institution which creates money by money
only.”
Indian Company Law 1936 defines Bank as;
“ A banking company which receives deposits through current
account orany other forms and allows with-drawal through
cheques or promissory notes.”

Commercial Bank:
A commercial bank is a type of bank that provides financial
services to individuals and businesses. They accept deposits
from customers and provide various types of loans. It's like a
one-stop shop for your banking needs.

(Optional)Commercial banks offer a range of services to

meet the financial needs of individuals and businesses. Some
additional services they provide include:
1. Savings Accounts: Commercial banks offer savings accounts
that allow individuals to deposit and save their money while
earning interest.
2. Current Accounts: These accounts are designed for day-to-
day transactions, providing features like check-writing, debit
cards, and online banking.
3. Credit Cards: Banks issue credit cards that allow customers
to make purchases on credit and pay back the amount later.
4. Mortgages: Banks offer mortgage loans to help individuals
purchase homes, providing long-term financing options.
5. Investment Services: Some commercial banks have
investment divisions that offer services like brokerage, mutual
funds, and financial planning.
6. Insurance: Many commercial banks provide insurance
products such as life insurance, health insurance, and property
insurance.
7. Foreign Exchange: Banks facilitate currency exchange for
international travelers and businesses engaged in foreign trade.
8. Online Banking: Commercial banks offer online banking
platforms that allow customers to manage their accounts, make
transfers, and pay bills electronically.

These are just a few examples of the services offered by

commercial banks.

Primary and Secondary functions of a Commercial Bank:

Primary Functions:
1. Accepting Deposits: Commercial banks accept various types
of deposits, such as savings accounts, current accounts, and
fixed deposits.

2. Granting Loans: They provide loans and credit facilities to

individuals and businesses, helping them meet their financial
needs.

Secondary Functions:
1. Credit Creation: Commercial banks have the ability to create
credit by lending out a portion of the deposits they receive.
2. Payment Services: They facilitate payment transactions
through services like issuing checks, debit cards, and providing
online banking facilities.
3. Foreign Exchange Services: Commercial banks offer foreign
exchange services to facilitate international trade and currency
conversion.
4. Investment Banking: Some commercial banks provide
investment banking services, including underwriting securities,
mergers and acquisitions, and advisory services.
Negotiable Instruments:
Negotiable instruments are documents that represent a
promise to pay a specific amount of money. They can be
transferred from one person to another, making them a
convenient way to facilitate transactions and payments.
Examples of negotiable instruments include checks, promissory
notes, and bills of exchange. These instruments are legally
enforceable and provide a level of security and convenience in
financial transactions.

Negotiable instruments have a few key features:

1. Transferability: They can be transferred from one person to
another, allowing for easy exchange and payment.
2. Legal enforceability: Negotiable instruments are legally
binding documents that provide a level of security and
protection for both parties involved.
3. Value: They represent a specific amount of money or a
promise to pay a certain sum, making them a reliable form of
payment.
4. Uniformity: Negotiable instruments follow standardized
formats and rules, ensuring consistency and ease of use.
5. Acceptance: They are widely accepted in commercial
transactions, making them a convenient and trusted method of
payment.
These features make negotiable instruments a valuable tool in
facilitating transactions and ensuring the smooth flow of
commerce.

Time value of Money:

The time value of money refers to the idea that money
available today is worth more than the same amount in the
future. This is because money can earn interest or be invested,
allowing it to grow over time. So, the value of money changes
depending on when it is received or spent. The theory behind
the time value of money is based on the concept of opportunity
cost and the idea that money has the potential to earn a return
over time. Essentially, it recognizes that a dollar received today
is more valuable than a dollar received in the future due to the
potential to invest or earn interest on that dollar.

There are a few key factors that contribute to the time value of
money:
1. Future Value: Money has the potential to grow over time
through interest, investments, or other forms of returns. So,
receiving money today allows you to take advantage of future
growth opportunities.

2. Present Value: Conversely, the value of money decreases

over time due to inflation and the potential loss of purchasing
power. So, receiving money in the future means you may have
less buying power compared to receiving it today.

3. Risk and Uncertainty: The time value of money also takes

into account the risk and uncertainty associated with future
cash flows. There is always some level of risk involved when
projecting future returns or payments, and the time value of
money accounts for this uncertainty.
By considering these factors, individuals and businesses can
make informed financial decisions regarding investments,
loans, and other financial transactions. It's like a way to make
sure you're making the most of your money by considering its
potential growth and purchasing power over time.