Major Function of a Bank :

What is the Functions of Bank?
Major Function :
1.To Mobilise deposits from the public and
2.Invest or Lend these Deposits The Banks
3.Pay interest on the Deposit
4.Receive interest On the lendings and Investments Made by them.
5.Earn profit from the difference between the interest received and the interest paid.

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Definition of Endorsement

Meaning of Endorsement :
When the maker or holder of negotiable instrument signs the same, otherwise than as maker, for the negotiation on the back or face thereof or on a slip of paper annexed thereto, or signs for the same purpose a stamp paper intended to be completed as a negotiable instrument, he is said to have endorsement the same and is called the endorser. Endorsement consists of the maker (or Drawer), Name of the Payee of negotiable instrument with the Intention of Negotiation.

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What is Negotiable Instruments (NI)?

Negotiable Instruments :
 Section 13 :” A Negotiable Instrument Means a promissory Note, Bill of Exchange or Cheques Either To Order Or Bearer.”

Characteristics of Negotiable Instruments  :
Easily Transferable From one Person to Another by mere Delivery in case of bearer instrument and delivery in case of order Instruments.

The Holder in due Course and possesses the right to sue upon instrument in his own Name.

Promissory Note :
Section 4 : “  A promissory note is an instrument in Writing, Containing an Unconditional Undertaking, signed by the Maker to pay a certain sum of money only to, or to the order of a certain Person or to the Instrument.”

Bill of Exchange :
Section 5 : “ A Bill of Exchange is an Instrument in writing containing an unconditional order signed by the maker, Directing a certain person to pay a certain Sum of Money Only to, or to the order of a certain Person or to the Instrument.”

Cheque :
Section 6 : “A Cheque is a bill of exchange Drawn on a Specified Banker and not Expressed to be otherwise than on Demand.” After 2002 Amendment, Cheque Include “ the Electronic Image of a truncated cheque and a in the electronic form.

Endorsement :
Definition of Endorsement :
When the maker or holder of negotiable instrument signs the same, otherwise than as maker, for the negotiation on the back or face thereof or on a slip of paper annexed thereto, or signs for the same purpose a stamp paper intended to be completed as a negotiable instrument, he is said to have endorsement the same and is called the endorser. Endorsement consists of the maker (or Drawer), Name of the Payee of negotiable instrument with the Intention of Negotiation.

Payable to Order or Bearer :
           The instrument must be payable either to order or to bearer as per the provision of sec 13 of the Act.
For example : if a cheque is drawn with the expression “Pay to Manoj Kumar” it indicates that it can be paid to Manoj or any Person as per his order. But if it is written pay to “Manoj Kumar” Only it must be paid to Manoj kumar Only. A bill of exchange and cheque are payable to Bearer it is expressed to be so payable or if the last endorsement is an endorsement in blank.


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What is Commercial Bank?

Commercial Banking In India :
                          It is Composed of Different entities each with a Specific role to play and Specific Segment to cater to.

Commercial Banks :
Indian Commercial Banks – Scheduled or Non Scheduled Banks.
SBI and Its Associates
Foreign Banks
Rural Financing Agencies :
Co-Operative Banks
Land Development Banks
Regional Banks
National Bank for Agriculture and Rural Development
Development Finance Institution :
Industrial Finance Corporation of India
Industrial Credit and Investment Corp of India.
Export Import Bank
National Housing Banks and Etc….
Non Banking Financial Intermediaries :
LIC of India
General insurance Corporation of India.
Unit Trust of India.
Mutual Funds.
Post Office Savings Banks
The Reserve Bank Of India (RBI)


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Main Functions of Bank :

What is the functions of Bank?
Most Important Main Functions of Bank :

Central Banking Service :
Issue of Currency of NotesActs as the banker to the Govt.
Ctrl’s the Credit
Acts ass banker’s bank
Regulates the internal and External Value of Money.

Commercial Banking Service  :
Receiving Various Types of Deposit .
Lending Various types oof Loans.
Extending Some Non Banking Customer Services.

Specialized Banking Services :
Industrial Banks to lend long term loans for individuals
Lend mortgage banks for granting loans on equitable mortgage
Rual Credit Banks for generating funds extending rural credit.

Non Banking Financial Service :
                                 Many banks in India are offering ancillary services and non banking financial services Like Custodial service, Letting out of Safe Deposit lockers, Wealth mgt Services, Foreign Exchange etc…..


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Types of Banks :

What are The Types of Banks?

Banking Types :
Indian Commercial Banks are Classified into two types. They are  :
1.Scheduled Bank  :
                                    Scheduled Banks are those Indian Commercial Banks are Which the included in the Second Scheduled to the RBI Act, 1934. Foreign Banks are included in the second Scheduled to the RBI.
Non-Scheduled Bank Meaning  :

                                  Non-Scheduled Bank are those which are not included in the Second Schedule of the RBI. In this type of Bank do not Enjoy the all the facilities.


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Achievements after Nationalizations of Banks :

Achievement of Nationalization Bank :
Accelerated branch Expansion in rural And Backward regions – In 1969 Bank branches in rural areas accounted to only 22.5% of the total number of branches. Today Branches in Rural areas a/c to 52%.
Deposit Mobilization – after nationalization banks attract deposits from different section by means of attractive deposit schemes.
Increase in Total Transactions – The total deposit which was 4,664 Crore in 1969 increased 55.22 Millions.
Profit Making – after nationalization, Banks are making Profits in addition to achieving economic and Social Objectives.
Safety – the Government has given Importance to safety of thee banks.
Development Functions – Progress of agriculture, rural development, industry, trade and other developmental plans of the govt.
Advance under Self Employment Scheme – Banks Play a significant role in promoting self Through Advances to Unemployed through Various Schemes of the govt.

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