National Bank

INTRODUCTION Early banking system served mainly as depositors for funds, while the more than modern system has considered the supplying of credit their main purpose. A Bank non only accepts money or deposits except similarly lends money and creates its possess credit, Crow her has defined a bank as a dealer in debts- his own and of other people. Sawyers states, We gouge define a bank as an institution whose debts (bank deposits) be widely authorized in settlement of other peoples debts to each other The part of financial institutions c bothed commercial banks has one important slipistic that distinguishes it from all other kinds of financial institutions. This important distinction is that it alone can hold deposits to be drawn upon by check; it has the cause to create and destroy money, inwardly limits, through the use of loans and hire deposits. Commercial banks lend money by creating demand deposits and crawl in loans by canceling demand deposits. The functions of modern commercial banks are many and overlap with those of such other financial institutions. They are intimately sharply differentiated from other financial institutions by the character of their principal liabilities.

Only commercial banks hold demand deposits, which give the most important component of money supply, thus banks are unique among non-governmental institutions as administrators of demand deposits and as money issuers. They watch not only size of the money stocks but also the allocation of funds and thus the direction and use of resources within the system as a whole. Historical Development of Banking seam in Bangladesh For an economy, money is like as blood in a body and a bank may be compared with an artery system of a body. Modern banking system is not a consequence of an accident, but a result of a gradual systematic development. After independence, there was serious crisis in banking sector of Bangladesh. Out of 36 scheduled banks, only cardinal banks had there head office in... If you want to get a full essay, order it on our website: Orderessay

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