Basic Banking terms
In this blog, we learn the basic terminology of banking and the different roles of people in a bank.
Customer service executive :
A customer service executive helps someone who wants to open an account, also called an account-holder, with the bank. Different people have different roles to play in a bank
Teller :
Gives or receives cash to someone who wishes to withdraw or deposit money from their account
Bank manager :
Responsible for making sure everyone else does their job and for making important decisions related to the bank
“A bank is also a business and it deals with money,”
Role of a bank :
The Role of a bank is to take money from people who have more money than they immediately need and lend it to people who have less than what they need. The money a bank takes from a person is called a deposit, while money given to a person who needs it is called a loan
How do we trust a bank to keep my money safely?
Only someone who can prove that they have the good intention and the required ability to run a bank can get a license to start a bank.
What if I need my money? How will the bank return it?
Lakhs of people deposit money with a bank. Banks give lesser loans as compared to the deposits they get. There are laws which will not let a bank give more than a certain portion of deposits as loans.
Also, when you make a deposit with a bank, you get something in return for it. That earning which you get for keeping your money with the bank is called interest
Interest :
Interest can be both paid and received. When you have excess money and deposit it with the bank, you get interest. Whereas, if you need money and take a loan from a bank, you must pay interest to the bank.
In the next lesson, we will learn about the bank account opening kit and the requirements needed to fulfill its criteria.
Note : I intend to share what I learn through this blog. Since these are mostly notes, I have tried not to be extra creative with my sentences. The phrases are mostly extracted from the source, as they were. Due credits go to TCSiON Reference Material for Financial Literacy