What Financial Institution Is

By Author: Rodrigo Freitas
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The meaning of a bank differ from country to country. Under English law, a bank is defined as a person who carries on the commerce of banking, which is specified as:
acccomplish current financial records for his clients
forfeit cheques drawn on him, and balance
collecting cheques for his customers.

A banker or bank is a financial institution that acts as a payment agent for customers, and scrounge and loan money. In some countries such as Germany, banks are the primary owners of industrial corporations while in other countries such as the United States banks are forbidden from owning non-financial companies. In Japan, banks are usually the nexus of cross share holding entity known as zaibatu.

Banks act as payment agents by behave checking or current accounts for customers, paying cheques drawn by customers on the bank, and collecting cheques consign to customers' current accounts. Banks also enable customer payments via other payment technique such as telegraphic convey, EFTPOS, and ATM.

Banks borrow money by accepting funds deposited on current account, accepting term deposits and ...
... by deliver debt securities such as banknotes and tie. Banks lend money by making advances to customers on current account, by making instalment loans, and by investing in saleable debt securities and other forms of lending.

Banks provide almost all payment services, and a bank account is considered indispensable by most businesses, individuals and governments. Non-banks that provide payment services such as remittance companies are not normally considered an sufficient substitute for having a bank account.

Banks borrow most funds borrowed from households and non-financial businesses, and lend most funds lent to households and non-financial businesses, but non-bank lenders provide a significant and in many cases adequate substitute for bank loans, and cash market funds, cash management trusts and other non-bank financial institutions in many cases provide an adequate substitute to banks for lending savings to.