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Write a note on Banking

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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.