Bank is an institution where you can deposit your money and borrow loans. Where by banking is a process by which bank provide different facilities to its customer related to their needs and also advance loans by taking securities in return. Banking operation means how bank operates or simply what facilities bank provides. Banking is a wide term which normally base on two major parts deposits and advancing loan (credit).
Deposits are in form of cash and securities; these were received by the individuals, firms and corporations, and are repayable on demand of customer or may be invested in short term loans. Current, fixed and saving accounts are used to deposit money in the bank. Borrow loans means advancing the money in term of loans to individual, groups and organization. Banking operations includes functions of banking, creation of credit, transfer of funds or services, saving, mortgage, private banking, online banking, projects developments, capital markets and treasury, trade finance, issuing bill of exchange, bill of exchange is issue on three basis at par, at discount and at premium.
Operation of commercial banking are of two sided; involve attracting funds from depositors, and employment of funds in viable investments. The bank creates credit by issuing credit cards, ATM cards, visa cards etc. Banknotes and current accounts are used by the bank to issue the money. Claims are negotiable and repayable on demand, while drawing a cheque or creating banknotes claims are effectively transferable. Banks provides the facilities of collection and paying agents for all their customers. It also internally takes part in clearing and settlement department to present, collect and pay payments instruments. For creating more credit and to increase the transaction banks work as a middle men and borrow and lend loans. Mostly bank lend money to those who deposit securities or bond etc. the security on banknotes and deposits are comparatively low.
Bank borrows short term loans from one person and lends long term loans to another person and also charged high rate of interest. For creating stronger credit quality banks have to maintain high reserves to clear the unexpected claims or for economic stability, more investment in marketable securities. Banks used different ways or channels to elaborate banking operations ATM machines are used to withdraw money by using a ATM card, its contain a special code which relates to the same account. Call center and branches are also means of exchange of information which is necessary and important for every customer. Online and mailing banking is also used to access to the customers problems and many transaction and disbursement are used to be done by online banking. Mobile banking is also done by many banks these activity is more advance than other payments of bills and other disbursements are done through mobile phone. Telephone and video banking is also a mean or a channel to communicate with the customers or the persons who need to know abut banking operations more descriptively.
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