Banks And Their Function In Society And The World

Banks are financial institutions that act as go-betweens between the people and the financial world

. They facilitate many different transactions that usually focus on money and other forms of finances. There are several kinds of these institutions and all of them are where people go to save, deposit and store their money and valuables. Despite this being the primary function of this establishment, these days, there are also other kinds of transactions that they dabble in.

Primary Function

One of the primary functions and services that banks offer their clients has something to do with deposits. There are several kinds, namely: savings, fixed, current and recurring. These usually have something to do with a deposit of a certain amount of money into the establishment and the management of the withdrawal and earnings of these deposits. This function does not necessarily mean that there will be a return on the investment unless specified by the type of investment that the depositor has initially entrusted the institution with. Another service that one can get from them is the granting of advances and loans to the general public and clients upon approval of the credit line. There are other requirements that the individual or company might need to comply with for the loan or the advance. Examples of these are credit cards and overdrafts. Other types of loans or advances may be available with the establishment depending on what it can offer and what they are capable of doing for their clients.

Secondary Functions

There are also some banks that offer other services and functions to their clients. One common secondary service is that of an agent for their clients. Being an agent means doing transactions such as funds transfers, check collections, management of the client's portfolio, periodic payments and collections and acting as trustees, executors or representatives for their absentee clients. Another function that these establishments might be able to offer to their customers is general utility such as the issuance of drafts and a letter of credits, underwriting of shares, facilities such as lockers and deposit boxes, transactions in foreign exchange and project reports. These secondary services might not be available in all of the establishments that are in the city so it is advisable to initially ask those in the management which ones are available as well as to have them explain in detail what is included in these functions. In most cases, the banks have a charge for every transaction that they facilitate or make for their client. These can be charges that they collect for the government as well as charges that they collect from their clients for the work and services that they do for them.

This is just a general overview of what establishments of these kinds can and will do for their customers. There may be more services and functions that they offer for the sake of their clients. They usually advertise these services and functions in order to attract more clients and customers to their establishment.

by: Alfred Ardis

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