Banking and e-banking

Banking means accepting deposits of money from the public for the purpose of lending or investment, deposits that are repayable on demand and can be withdrawn by cheque. In short, a bank takes in people's savings and lends them out to those who need money.

Types of banks:

• Commercial banks: public sector (mostly owned by the government) and private sector (owned by private people).
• Cooperative banks, set up under the cooperative laws, often for farmers and small traders.
• Specialised banks, for particular needs such as foreign trade or industrial finance.
• The central bank, the Reserve Bank of India, which controls the whole banking system and the supply of money.

Functions of commercial banks:

• Accepting deposits: a current account for businesses, where money can be paid in and taken out any number of times; a savings account for households; a recurring deposit, where a fixed sum is paid in every month; and a fixed deposit, where a lump sum is kept for a fixed period. The longer and more fixed the deposit, the more the bank can use it, so the more interest it pays.
• Lending funds: overdrafts, cash credit, loans and discounting of bills.
• Cheque facility: a bearer cheque can be cashed at the bank's counter by whoever holds it; a crossed cheque (two parallel lines across the corner) can only be paid into the payee's bank account.
• Remittance of funds: sending money from one place to another, for example through a bank draft.
• Allied services: paying bills, lockers, buying and selling shares, and more.

E-banking means banking through the internet and electronic machines: ATMs, PoS machines (where you pay by card in a shop), EDI (electronic data interchange), debit and credit cards, electronic cash, and transfers by NEFT (in batches, settled in an hour or two) and RTGS (immediate, for large sums). It is available 24 hours a day, 365 days a year, from anywhere, and it keeps a clear record of every transaction.