Banking
Banking
Banking (pronunciation: /ˈbæŋkɪŋ/) is a financial system that is primarily concerned with accepting deposits from the public, creating credit, and lending money. The term "banking" is derived from the Italian word "banca", which means "bench" or "counter".
History
The history of banking began with the first prototype banks which were the merchants of the world, who gave grain loans to farmers and traders who carried goods between cities. This was around 2000 BC in Assyria, India and Sumeria. Later, in ancient Greece and during the Roman Empire, lenders based in temples gave loans, while accepting deposits and performing the change of money.
Types of Banking
There are several types of banking, including:
- Retail Banking - This type of banking involves providing direct services to individuals and small businesses.
- Commercial Banking - Commercial banking services are provided to larger businesses and corporations.
- Investment Banking - Investment banks provide services related to underwriting and mergers and acquisitions.
- Private Banking - Private banking involves providing personalized financial and banking services to high net worth individuals.
- Online Banking - Online banking, also known as internet banking, e-banking or virtual banking, is an electronic payment system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial institution's website.
Related Terms
- Loan - A loan is a sum of money that is expected to be paid back with interest.
- Interest - Interest is the charge for the privilege of borrowing money, typically expressed as an annual percentage rate.
- Credit - Credit is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately, but promises either to repay or return those resources at a later date.
- Deposit - A deposit is a sum of money placed or kept in a bank account, usually to gain interest.
External links
- Medical encyclopedia article on Banking
- Wikipedia's article - Banking
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