Banking is an essential part of modern economy. The idea behind banking is effective use of money. In general, banking deals with the concept of lending. While making the historical study of our society, we came to know that presence of money lenders is always there, which has now been replaced with the concept of banking. While studying the thoughts of Quran, and Arthashastra of Kautilya, we found one common reference is present in them i.e. the rate of interest. Thus, the same concept has been used by today’s modern banking. During the medieval age, the concept of banking was carried out at the individual level, but in modern times it has also included the partnership formulation, i.e. banking of stock market companies.
While making the fundamental study of banking, it has been identified that it is a concept that deals with the facilities like:
• Cash storage
• Credit/Loan facility
• Investment
• Deposit/Withdrawal
• Currency Exchange
• Forex Trading and
• Various other financial transactions.
Banking is the key area which is responsible for the efficient driving of an economy of a country. Somehow one can also say that bank is a link between depositors and borrower, i.e. it accepts deposit from a customer (in certain rate of interest) and credit them to the borrower in certain high rate of interest. This transfer of money between depositor and borrower is done under the regulations of the central bank of a country.