What is Bank? What Are Principal Of Bank? Types of Bank

What is Bank?

A bank is a financial institution that is licensed to receive deposits in the form of money and to give loans. Banks may also provide financial services, such as wealth management, currency exchange and safe deposit boxes. The primary role of banks is to take deposits and make dept.

What Are The Principal of Banks?

1. Liquidity - 

The state of owning things of value that can be exchanged for cash.

2. Economics - 

Profitability is a measure of an organization's profit relative to its expenses.

3. Solvency - 

The state of not owing money to anyone or of having the ability to pay your debts

Types of Banks

1. Central Banks - 

A financial institution which is controlled by government. It is also known as public sector bank. The main perspective of this bank is to control the money supply and currency of our country. The main objective of many central bank is price stability. It does act as a bank for the commercial banks and this is how it influences the flow of money and credit in the economy to achieve stable prices.

Example - Reserve Bank of India which is also known as RBI is the authority which control all the banks which is currently regulated in our country.

2. Investment banks - 

An investment bank is a financial service company that acts as an intermediary in large and complex financial transaction. It is usually involved when a startup company prepares for its launch of an (IPO) initial public offering and when a corporation merges with a competitor. 

Example - HDFC Bank is the top most investment bank in India.

3. Commercial aur corporate banks - 

It it is also type of financial institution which means accept deposits, makes different kind of loans. Commercial banks also provide certificate of deposits (CDS) and saving account for individual or business.

Example - Bank of India, Bank of Baroda, Bank of Maharashtra, State Bank of India Canara Bank, Central Bank

4. Consumers or Retail Banks - 

Retail bank are also known with different name like consumer Bank, personal Bank, retail bank etc. It man function is to provides financial services to consumer rather than businesses. It provide better services to individual consumers like manage their money, have access to credit, and deposit their money in a secure manner. Services offered by retail banks include checking and savings accounts, mortgages, personal loans, credit cards, and certificates of deposit (CDs). 

Example - Yes Bank Limited, Axis Bank Limited, Bandhan Bank Limited, State Bank of India Limited, and HDFC Bank.

How to choose best saving account?

First you have to know your purpose and why you need banking services. Choose a retail bank if you want to manage your savings or a commercial bank if you want to get money for business.