What is Bank?

How Bank comes?

Definition of Bank

What Bank does?

Before going to definition let us have a look the scenario given here below:

You can see in first scenario there is a man who needs money and other one who has non performing lazy money but scared of steal of the money. In second scenario the man who needs money ask to lend money to other one? But there is a lack of trust that’s why he refuses to lend money. In third scenario the Bank comes to rescue both party. The bank offers the man to keep his non performing money to him and ensure the safety of that money moreover the bank offers interest to keep money. Later the Bank offer the other man that he can take loan with some conditions like giving some sorts of documents or goods as a mortgage, and he have to repay the debts within certain period of time with 17% interest. And finally bank do profit (17-5=12) by taking more interest from party (17%) and giving less interest (5%) to party.

So yes, bank does business with your money. It acts as an intermediary in financial transactions. It takes deposit and gives less interest to the depositor. The depositor can withdraw his/her money anytime with the cheque. It gives loan to the customer, party, factory, organization, even government with some conditions and in return it takes more interest from them and by this it makes profits.