Bank

TheBank of England,established in 1694.

Abankis afinancial institutionwherecustomerscan save orborrowmoney.Banks alsoinvestmoney to build up their reserve of money. What they do is regulated bylaws.Those laws differ in differentcountries.The people who work at a bank are called bankemployees.Certain banks deal directly with thepublicand are the only ones that a regular person will work with. Other banks deal withinvestmentsandinternationalcurrencytrading.

The customer's money may be placed in the bank for safekeeping. Banks may giveloansto customers under anagreementto pay the money back to the bank at a later time, withinterest.An example is getting amortgageto buy a house or apartment. Banks also can use the money they have fromdeposit accountstoinvestinbusinessesto make more money.

In most countries, the rules for banks are made by the government acting through laws. Acentral bank(such as theBank of England) changes how much money is issued at a particular time. This is a factor in theeconomyof a country, and thegovernmentmakes the big decisions. These "banks of issue" take in, and issue out,coinsandbanknotes.

History

The wordbankcomes from theItalianwordbanco,meaninga bench,since Italianmerchantsin theRenaissancemade deals to borrow and lend money beside a bench. They placed the money on that bench.

Elementaryfinancialrecords are known from the beginning of history.Bakedclayrecords were done before the invention ofwriting.

In the 17th century, merchants started storing their gold with goldsmiths in London. Thegoldsmithshad their own vaults and charged a fee for storing the merchants' gold. The goldsmiths eventually started loaning money using the gold left to them and also paidintereston the gold.

TheBank of Englandbegan issuingbanknotesin 1695. The oldest bank still in existence isMonte dei Paschi di SienainSiena,Italy,which started in 1472.

Banking activities

A bank usually provides the following services:

• Checking account
• Cheque books
• Savings account
• Money market account
• Certificate of deposit(CD)
• Individual retirement account(IRA)
• Credit card
• Debit card
• Mortgage
• Mutual fund
• Personal loan
• Time deposit
• Automated teller machine
• Transactional account

Types of banks

• Community development bank:regulated banks that provide financial services and credit to under-served markets or populations.
• Land development bank:The special banks providing long-term loans are called land development banks, in the short, LDB. The history of LDB is quite old. The first LDB was started at Jhang in Punjab in 1920. The main objective of the LDBs is to promote the development of land, agriculture and increase the agricultural production. The LDBs provide long-term finance to members directly through their branches.
• Credit unionorCo-operative bank:not-for-profit cooperatives owned by the depositors and often offering rates more favorable than for-profit banks. Typically, membership is restricted to employees of a particular company, residents of a defined area, members of a certain union or religious organization, and their immediate families.
• Postal savings:savings banks associated with national postal systems.
• Offshore bank:banks located in jurisdictions with low taxation and regulation. Many offshore banks are essentially private banks.
• Savings bank:focuses on accepting savings deposits and paying interest on deposits.
• Building societyandLandesbanks:institutions that conduct retail banking.
• ADirect or internet-only bankis a banking operation without any physical bank branches, conceived and implemented wholly with networked computers.