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The origin of the  

 goes back to the first decade of the
nineteenth century with the establishment of the Bank of Calcutta in Calcutta on
2 June 1806. Three years later the bank received its charter and was re -designed
as the Bank of Bengal (2 January 1809). A unique institut ion, it was the first
joint-stock bank of British India sponsored by the Government of Bengal. The
Bank of Bombay (15 April 1840) and the Bank of Madras (1 July 1843)
followed the Bank of Bengal. These three banks remained at the apex of modern
banking in India till their amalgamation as the Imperial Bank of India on 27
January 1921.

Primarily Anglo-Indian creations, the three presidency banks came into

existence either as a result of the compulsions of imperial finance or by the felt
needs of local European commerce and were not imposed from outside in an
arbitrary manner to modernise India's economy. Their evolution was, however,
shaped by ideas culled from similar developments in Europe and England, and
was influenced by changes occurring in the structur e of both the local trading
environment and those in the relations of the Indian economy to the economy of
Europe and the global economic framework .

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The establishment of the Bank of Bengal marked the advent of limited liability,
joint-stock banking in India. So was the associated innovation in banking, viz.
the decision to allow the Bank of Bengal to issue notes, which would be
accepted for payment of public revenues within a restricted geographical area.
This right of note issue was very valuable not only for the Bank of Bengal but
also its two siblings, the Banks of Bombay and Madras. It meant an accretion to
the capital of the banks, a capital on whi ch the proprietors did not have to pay
any interest. The concept of deposit banking was also an innovation because the
practice of accepting money for safekeeping (and in some cases, even
investment on behalf of the clients) by the indigenous bankers had n ot spread as
a general habit in most parts of India. But, for a long time, and especially up to
the time that the three presidency banks had a right of note issue, bank notes and
government balances made up the bulk of the investible resources of the banks .

The three banks were governed by royal charters, which were revised from time
to time. Each charter provided for a share capital, four -fifth of which were
privately subscribed and the rest owned by the provincial government. The
members of the board of directors, which managed the affairs of each bank,
were mostly proprietary directors representing the large European managing
agency houses in India. The rest were government nominees, invariably civil
servants, one of whom was elected as the president of t he board.

  

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The banking industry like most big industries has evolved a lot over the years
and is completely different from when it was first introduced to society.

When banks first started up in the 3rd millennium B.C they started life as a sort
of religious temple. The deposits that were put into these banks at the time
consisted of things such as varieties of grain and some time later even cattle.
There were even agricultural tools that were deposited and then later precious
metals.

Temples were used for these deposits s they were regarded as the safest places.
Much later priests of the temples often gave out l oans to people.

History has shown that both the Ancient Greeks and Romans were the first to
use sophisticated banking procedures such as issuing loans and currency
exchanging, deposits and even the validation of coinage. A lot of these were
carried out by not only the temples but also private and civic societies.

Most of the moneylenders of the day started to use transactions that they
recorded in books. As the fall of the Roman Empire and rise of the hostilities in
the church took hold bankers were not nee ded as much.

The Christian church put a prohibition on charging interest. This led to other
religions such as the knights of templar and the Jewish community starting to
practice their own banking systems.

The origins of book keeping and double entry came from an Italian family
known as the Lombard's. Another family, the Medici's was later usurped by a
German family, The Fuggers who went on to bank for the Papacy as well as
many of the great princesses.

It was not until the 16th century when we saw a system of banking where
merchants could access their money from different places without actually
physically transferring any money. This century also saw the birth of the
cheque. Slowly these systems became popular and more accepted and came to
develop into the financial institutes we now see today.




A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial
assets over time, between the lender and the borrower.

In a loan, the borrower initially receives or borrows an amount of money, called the principal,
from the lender, and is obligated to pay back or repay an equal amount of money to the lender
at a later time. Typically, the money is paid back in regular installments, or partial
repayments; in an annuity, each installment is the same amount.

The loan is generally provided at a cost, referred to as interest on the debt, which provides an
incentive for the lender to engage in the loan. In a legal loan, each of these obligations and
restrictions is enforced by contract, which can also place the borrower under additional
restrictions known as loan covenants. Although this article focuses on monetary loans, in
practice any material object might be lent.

Acting as a provider of loans is one of the principal tasks for financial institutions. For other
institutions, issuing of debt contracts such as bonds is a typical source of funding.

 

Secured

A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as
collateral for the loan.

A subsidized loan is a loan that will not gain interest before you begin to pay it. It is known to
be used at multiple colleges.

An unsubsidized loan is a loan that gains interest the day of disbursement.

A mortgage loan is a very common type of debt instrument, used by many individuals to
purchase housing. In this arrangement, the money is used to purchase the property. The
financial institution, however, is given security ² a lien on the title to the house ² until the
mortgage is paid off in full. If the borrower defaults on the loan, the bank would have the
legal right to repossess the house and sell it, to recover sums owing to it. In some instances, a
loan taken out to purchase a new or used car may be secured by the car, in much the same
way as a mortgage is secured by housing. The duration of the loan period is considerably
shorter ² often corresponding to the useful life of the car. There are two types of auto loans,
direct and indirect. A direct auto loan is where a bank gives the loan directly to a consumer.
An indirect auto loan is where a car dealership acts as an intermediary between the bank or
financial institution and the consumer.

A type of loan especially used in limited partnership agreements is the recourse note.
A stock hedge loan is a special type of securities lending whereby the stock of a borrower is
hedged by the lender against loss, using options or other hedging strategies to reduce lender
risk.[

A pre-settlement loan is a non-recourse debt, this is when a monetary loan is given based on
the merit and awardable amount in a lawsuit case. Only certain types of lawsuit cases are
eligible for a pre-settlement loan. This is considered a secured non-recourse debt because if
the case reaches a verdict in favor of the defendant the loan is forgiven.

  

Unsecured loans are monetary loans that are not secured against the borrower's assets. These
may be available from financial institutions under many different guises or marketing
packages:

!? credit card debt

!? personal loans
!? bank overdrafts
!? credit facilities or lines of credit
!? corporate bonds (may be secured or unsecured)

The interest rates applicable to these different forms may vary depending on the lender and
the borrower. These may or may not be regulated by law. In the United Kingdom, when
applied to individuals, these may come under the Consumer Credit Act 1974.

å 

Demand loans are short term loans (typically no more than 180 days) that are atypical in that
they do not have fixed dates for repayment and carry a floating interest rate which varies
according to the prime rate. They can be "called" for repayment by the lending institution at
any time. Demand loans may be unsecured or secured.

 

Whether public or private, commercial or government or private - there are several types of
banks, each handling its own specific role.

There are various types of banks in the world, and each has a certain role to play - as well as a
specific domain - in which they operate. Broadly speaking, banks may be classified into
several groups on the basis of their activities such as investment banks, private, retail,
business, as well as corporate banks. Quite a few larger banks have multiple divisions that
cover some or all of the mentioned categories.
 !? Î : are concerned directly with consumers and small business owners.
Their focus lies on mass market products like current and savings accounts,
mortgages and other loans, as well as credit cards. Private banks also provide wealth
management services to high net worth individuals and families.
!?
 : service the businesses and other organizations that are medium scale
!? ë : serve clients who are usually major business entities.
!?   : offer their services related to financial markets, for instance,
mergers and acquisitions.

Another way in which banks may be classified is on the basis of their ownership. They may
be either privately held or publicly owned banks.

!? Ö   : are concerned with profits generated from their business
operations. These banks are held by the state governments of individual countries and
they serve as a nation's centralized bank, and an economic backbone for that particular
country. These banks are also called central banks.
!? Ö  : are controlled by the government, have several
responsibilities that are related to the banking sector of the country, like administering
various activities for the commercial banks of that country. They also are responsible
for determining the rates of interest offered by banks that are doing business in that
country. These banks also play a major role in maintaining liquidity in banking sector.

Î 


There are various types of notable retail banks. These include the offshore, community and
savings banks, and the community development banks, building societies, postal savings
banks, and ethical banks

!?
 : function in areas of reduced taxes, as compared to the country in

which the investor resides. This is why most of the offshore banks are private banks.
!? ë: These are monetary organizations operating on a local basis,
while the community development banks are concerned with the populations or
markets that have not been served properly.
!? Ö: are essentially savings banks which operate in conjunction
with the national postal systems of that particular country.
!?
  : are traditionally mutually owned by their customers. They offer a
full range of retail banking services, with a focus on mortgages.
!? c: conduct their business based on their own code of conduct. These
banks only accept investments that they recognize as useful from a social and
environmental point of view.

  


There are 2 types of investment banks-

!?   : that carry out underwriting activities, and

!? ' : which is a traditional form of banking that are concerned with
performing trade-financing activities.
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