Learn Banking structure in very simple words

Learn Banking structure in very simple words

What is the Banking?

Banking means nothing but a place where we deposit our money, avail the other operational services and borrow the money to fulfil our urgent needs and dream projects.

What is the Bank?

Bank means financial institution which accept the deposits from the common public and lend the money to needy public after fulfilling the criteria of lending.

                            

Structure of the Bank

DEPOSIT

Deposit means amount credited by the customer to their bank account. There are two types of Deposit. Saving Deposit, Recurring Deposit, Monthly Income Deposit, Fix Deposit and Current Deposit.Learn Banking structure in very simple words

Saving Deposit:

Saving Deposit means amount deposited by customer in their account and earn the interest on them from the bank.

Recurring Deposit:

Recurring Deposit means the Deposit wherein equal amount of installments has been credited or deposited by customer for the specific given period of time and after completion of time, received the lump sum amount with principal and interest.Learn Banking structure in very simple words

Monthly Income Deposit:

Monthly Income Deposit is the deposit wherein customer deposit the amount for quarterly, half yearly and yearly basis and opt the option of monthly income means they receive interest on monthly on their principal amount and after completion of tenure they only receive their principal.  In this type of deposit capital not appreciates.

Fix Deposit:

Fix Deposit means the deposit wherein depositor deposit their Lump sum money for specific period of time and after completion of the tenure they receive lump sum amount. In this type of deposit depositor receives good returns and their capital also appreciates.

Current Deposit:

Current Deposit is deposit wherein amount is deposited by the shop keeper or business man to park their daily collection. On these types of deposit, Depositor does not receive the interest.

Third party products

Third party product means selling the products which bank does not owns and sells for their tie up entity.

Banca insurance:

wherein bank sell the insurance product of tie up entity at the bank’s premises to their existing valuable customer.

Lending

Lending means providing capital assistance to needy one after fulfilling the lending policy criteria of the bank. Lending is the very important and crucial activity for the bank and quality lending is most important for the financial institutions now a days. More bank lends more they achieve the target and earns the good profit. Bank lend the money from deposit received.Learn Banking structure in very simple words

There are many types of loans which banks offer to their eligible customer. Home loan, Vehicle loan, Personal loan, Gold loans, Mortgage loan, Crop loan, Cash Credit.

Home loan:

Under this type of loan bank provide the credit assistance to Buy new or old House, to construct the house, to renew old house, etc.

Vehicle loan:

Under this type of loan scheme bank provide capital assistance to purchase new or old four-wheeler and two-wheeler to their eligible customers.

Personal loan:

Personal loan is given by the bank to their customers to meet their short-term obligations like marriage expenses, medical expenses etc.

Gold loan:

Under this type of loan scheme bank give the loan on gold and gold ornaments, gold coins for short term. It is given for one year and after one year loan account should be closed or renew by the customer or borrower.

Mortgage loan:

Mortgage loan is given by taking the property as a mortgage. Mortgage loan is given mostly for 10 Years.

Crop loan:

Crop loan is given by the bank to the farmer to meet their farming expenses. It is renewed every year and new loan limit is given by the bank to their crop loan account holders.

Cash Credit:

Cash Credit is given by the bank to the current account holders who are mostly big and well-known business man of the city or local area. It is given to business man to manage their working capital cycle.Learn Banking structure in very simple words