Banks are significant organization of the economy and provide institutional credit to its customers. A banking company in India is the one which transacts the business of banking which means agreeing, for the aim of lending and investment of deposits of capital from the public, repayable on request or otherwise and withdrawable by cheques, draft, order or otherwise. In easy terms, a bank agrees to take money on deposits, repayable on request and also makes a margin of profit by lending money. A bank encourages economic interests in the market by trading in money. It makes transferable the reserves of people and makes funds available to business financing their capital and revenue expenses. It also deals in financial instruments by providing financial services for a cost i.e., interest, discount, commission, etc. Banks are classified as given below:
Commercial Banks: Commercial banks are organizations which involve in dealing with money. They are taken care by Indian Banking Regulation Act 1949 and in accordance to it banking means accepting deposits of money from the public for the objective of lending or investment. The basic types of commercial banks are, public and private sector banks. The government has a major stake in public sector banks and they normally emphasize on social objectives than on gathering profits. Private sector banks are free as they are owned, managed and controlled by private promoters.
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