COMMERCIAL BANKS

CONTENT

1. Meaning of Bank
2. Origin of Banking
3. Types of Banks
4. Types of Accounts Operated in Commercial Banks

Meaning of Bank

A bank is a commercial institution that performs various financial activities such as accepting and handling deposits and other valuables. Simply put, a bank is a place where money and other valuables like will, jewellery, etc. are kept.

Origin of Banking

Banking had its origin with the goldsmiths in London in the seventeenth century. The goldsmith had facilities for storing valuables; therefore they accepted money and valuables from Merchants for safekeeping.

The first banking function was accepting deposit of cash from merchants who had no safe place to keep their money. The goldsmith demanded a charge for looking after their money. The second stage came when receipts for these deposits were being used as means o payment by merchants. The next stage was the development of money lending to customers with interest. This provided a profitable business; hence bankers began to offer inducement of interest to encourage merchants and others to increase their deposit.