Commercial banks are an important
institution of the economy for providing
institutional credit to its customers. A
banking company in India is the one
which transacts the business of
banking which means accepting, for the
purpose of lending and investment of
deposits of money from the public,
repayable on demand or otherwise and
withdrawable by cheques, draft, order
or otherwise. In simple terms, a bank
accepts money on deposits, repayable
on demand and also earns a margin of
profit by lending money. A bank
stimulates economic activity in the
market by dealing in money. It mobilises
the savings of people and makes funds
available to business financing their
capital and revenue expenditure. It
also deals in financial instruments and
provides financial services for a price
i.e., interest, discount, commission, etc.
