Meaning of Bank

Meaning of Bank

Bank is the financial institution licensed to deposits and lend loans it is a service provider institute which provides financial services like cash management, wealth management, currency exchanges, safe deposit plus they are also actively involved in different utility payment like payment of bills (Phone, Electricity, Internet, Water etc.). We all know that, finance is the life blood of trade, commerce and industry so banking is considered as backbone of modern business of any country.
The word bank is derived from Italian word “BANCA” and French word’’ BANQUE” which means Bench or money exchange table. Traditionally, European money lenders or changers used to display coins of different countries on benches for lending or exchanging purpose.
In other words; Bank is the financial institutions which deals with deposits & loans and other related services, it receives money from depositors who have surplus and gives money for needy people.
For example: A service holder earns Rs.50,000.00 per month and spends Rs. 30,000.00, in this example Rs.20,000.00 per month is his surplus and he might deposit surplus amount in bank and get interest and security.
Similarly, a service holder wants to buy house worth Rs. 95,00000.00 but he only have Rs. 30,00000.00 the deficit Rs.60,00000.00 shall be given by bank as Loan. (Bank may use credit system like his capacity, character, condition, collateral and capital before sanctioning loan.
Bank plays a vital role in economy, it accepts deposit, lends deposit and make investment with the aim of profit.
DEPOSITORS (Get interest) LENDERS (Pay interest)

Bank is an organization where people or business can invest or borrow money and it is established authorized by government to accept deposits, pay interest, clear cheque, grant loan. Banking sector has become more liberalized and systematic managed so today’s bank also provides utility payment remittance, foreign exchange, digital services (ATM, SMS Banking, E- Banking, Robert Banking)
Nepal Bank Ltd is the first commercial bank of Nepal and Nabil Bank is the first private commercial bank of Nepal. There are 27 commerical banks in Nepal and Nepal Rastra Bank has categorized Bank in to four categories

1. Commercial Bank                = A Class
2. Development Bank             = B Class
3. Finance  Company              = C Class
4. Micro Finance Company   = D Class