Professional Documents
Culture Documents
Introduction
1.1 Introduction of the Industry
The term bank is derived from the French word Banque and
Italian word Banco meaning the portable benches or counters
over which the money changer comes from. In the common
sense, an institution established by law that is involved in
monetary transaction is called "Bank". In other word we can
define bank as the financial intermediary between the depositors
and the entrepreneurs. A bank is a financial institution that
accepts varieties of deposits and make diversified loan. A bank
charges higher rate on loans and provide lower rate on deposits
and difference in the rates is the spread or profit to the bank.
Banks, in general, are business houses established to safeguard
peoples money, which is used to make loans and investments.
Money that is deposited in bank accounts earns additional
amounts for depositors in terms of interest. Banks provides many
services such as accepting various types of deposits, making
loans, providing means of payment, electronic banking and other
services such as travellers cheque and money orders.
Bank occupies quite important role in this modern business age
as the financial support for the needy people like: industries,
companies, and for individual people who need the money for
invest in productive sector. Along with this, Banks play vital role
in the economic development of nation and uplift the living
standard of the people of the country. Bank motivates people to
save their earnings and invest their savings in the productive
sectors. Integrated and speedy development of the nation is
possible only when competitive banking services reaches each
and every remote corner of the nation and people.
collects money from those who have it spare or who are saving it
out of their income and lends this out to those who require it."
According to, Horace White defines bank as a manufacturer of
credit and machine for facilitating exchanges.
According to Professor R.P.Kinley, "Bank is an establishment,
which
makes to individuals such advance of money as may be required
safety made and to which individuals entrust money when not
required for use."
According to Nepal's Commercial Bank Act, 2031(1974 A.D.),
bank means a commercial bank established under this act.
While summarizing above bank definitions it can be said about
the nature of bank that bank is an artificial individual created by
state's law, it is financial intermediary, it works as an agent,
issues notes, accepts cheque, provides 4 merchant banking
services and it works as an advisor of the customer and nation. In
this meaning, the bank looks as partner of the nation which
collaborates its efforts with the government for the upliftment of
the economy of the country.