General Understanding of Banks, Functions, Objectives and Types of Banks
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What is a bank? Definition of Banks is a financial institution that has the authority to raise funds from the public and channel them back to the community in the form of working capital loans to improve the living standards of the general public.
The term "Bank" comes from Italian, namely "Banco" which means bench. In this case the meaning of the word bench is where bankers operate in the past in serving their customers. The term "Banco" then changed and was more popular with the word BANK.
The bank has several financial service products that can be used by the general public. Some of the Bank's main products are:
Savings
Deposit
Payment Services (salaries, pensions, etc.)
Money Transfer Service (transfer)
Deposit Services (payment of electricity, telephone, water and other bills)
Credit card
And others
As mentioned in the Bank's definition above, the bank's function is as an institution that has the authority to raise funds from the community and channel them back to the community for various purposes.
In addition, there are 3 specific functions of the Bank, namely:
1. Agent of Trust
Banking activities can run well only if there is trust from the community. If the community has trusted the Bank, they will not hesitate to deposit their funds at the Bank.
The community's trust that the funds they have deposited at the Bank will always be safe and can be disbursed at any time. Vice versa, in channeling the deposited funds to the community in the form of loans is based on trust and applicable law.
2. Agent of Development
In economic activities there are two things that cannot be separated, namely the real sector and the monetary sector. Both of them influence each other.
The activities of the Bank to collect and channel public funds open opportunities for the public to carry out investment activities, distribution and other economic activities that cannot be separated from the use of money.
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