What is Bank. What is main source of income for bank.

What is bank. Functions of Bank

The bank is a financial institution. It is an artificial person. The bank accepts the deposits from the customers and giving to the customers when they required. Generally, peoples need only a little amount of money for their daily needs. Peoples will get money or a salary at the end of the money. at the peoples having a large amount but what they can do with that money. So it is better to save their money in the bank. The bank creat an account on the name of the customer. and take money as deposits and peoples also have provisions to withdraw. The bank gives interest also to the customers deposited money. Hence, the customers' money is safe and secure with the bank.

The banks don't demand the customers for deposits and withdrawals of money. But, it has some instructions to deposit and withdrawals the cash. Bank also provided the transfer of the money facility from one account to another account or other banks. Bank provides the cheque facility to the customer who is having an account with the bank. By the use of cheque, customers can make transfer money by mentioning beneficiary name, account and amount details. Bank also providing internet banking and mobile banking services also for the convenience of customers.

It is better to take a loan from banks 

Banks providing loans to their customers. It is better to take a loan from banks compare to private money lenders. The bank can charge a very low rate interest on the loan. But the private money lenders charge too much interest rate. Banking is the formal sector which means it follows certain rules and guidelines for their activities. The banks in India regulated by the Reserve Bank of India.

The banks can charge interest rates on loans as per the type of loan and amount of the loan. It has certain different rules for different types of loans. Bank can ask the collateral or property as the security for the loan amount. If the customers have to fail the repayment of the loan and try to escape from the debt bank will sell that property to obtain the loan amount.

What is the main source of bank

When the customers deposit money the banks keep only a small proportion of money themselves. This is kept as a provision to pay the customers who might come to the bank to withdraw money. Banks use the major portion of the deposits to extends the loans. Banks make use of deposits to meet the loan requirement of the customers.
The banks mediating between those who are having large deposits and who need of loan (borrowing). Banks charge a higher rate of interest on loans than what they offer to pay interest on deposits. The difference between the what charged from borrowers and what paid to the depositors is the main source of bank

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