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Banking Facilities

Banks provide a variety of services in the 21st century including lending through loans, overdrafts, and bill discounting. They also facilitate transactions through check/cheque payments, collection and payment of credit instruments, foreign currency exchange, bank guarantees, and remittance of funds. Additionally, banks offer modern digital services like credit/debit cards, ATMs, online and mobile banking to make financial transactions more convenient. The primary function of banks remains accepting deposits from customers and savers.

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Osama Ahmed
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95 views3 pages

Banking Facilities

Banks provide a variety of services in the 21st century including lending through loans, overdrafts, and bill discounting. They also facilitate transactions through check/cheque payments, collection and payment of credit instruments, foreign currency exchange, bank guarantees, and remittance of funds. Additionally, banks offer modern digital services like credit/debit cards, ATMs, online and mobile banking to make financial transactions more convenient. The primary function of banks remains accepting deposits from customers and savers.

Uploaded by

Osama Ahmed
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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BANKING FACILITIES IN 21th CENTURY

1. Advancing of Loans
Banks are profit-oriented business organizations. So they have to advance a loan to the public
and generate interest from them as profit. After keeping certain cash reserves, banks provide
short-term, medium-term and long-term loans to needy borrowers.
2. Overdraft
Sometimes, the bank provides overdraft facilities to its customers through which they are
allowed to withdraw more than their deposits. Interest is charged from the customers on the
overdrawn amount.
3. Discounting of Bills of Exchange
This is another popular type of lending by modern banks. Through this method, a holder of a bill
of exchange can get it discounted by the bank, in a bill of exchange, the debtor accepts the bill
drawn upon him by the creditor (i.e., holder of the bill) and agrees to pay the amount mentioned
on maturity.
After making some marginal deductions (in the form of commission), the bank pays the value of
the bill to the holder. When the bill of exchange matures, the bank gets its payment from the
party, which had accepted the bill.
4. Check/Cheque Payment
Banks provide cheque pads to the account holders. Account holders can draw cheque upon the
bank to pay money. Banks pay for cheques of customers after formal verification and official
procedures.
5. Collection and Payment Of Credit Instruments
In modern business, different types of credit instruments such as the bill of exchange, promissory
notes, cheques etc. are used. Banks deal with such instruments. Modern banks collect and pay
different types of credit instruments as the representative of the customers.
6. Foreign Currency Exchang
Banks deal with foreign currencies. As the requirement of customers, banks exchange foreign
currencies with local currencies, which is essential to settle down the dues in international trade.
7. Consultancy
Modern commercial banks are large organizations.They can expand their function to a
consultancy business. In this function, banks hire financial, legal and market experts who provide
advice to customers regarding investment, industry, trade, income, tax etc.
Related: When Banks Required to Disclose Customer Information
8. Bank Guarantee
Customers are provided the facility of bank guarantee by modern commercial banks.
When customers have to deposit certain fund in governmental offices or courts for a specific
purpose, a bank can present itself as the guarantee for the customer, instead of depositing fund by
customers.
9. Remittance of Funds
Banks help their customers in transferring funds from one place to another through cheques,
drafts, etc.
10. Credit cards
A credit card is cards that allow their holders to make purchases of goods and services in
exchange for the credit card’s provider immediately paying for the goods or service, and the
cardholder promising to pay back the amount of the purchase to the card provider over a period
of time, and with interest.
11. ATMs Services
ATMs replace human bank tellers in performing giving banking functions such as deposits,
withdrawals, account inquiries. Key advantages of ATMs include:
 24-hour availability
 Elimination of labor cost
 Convenience of location

12. Debit cards


Debit cards are used to electronically withdraw funds directly from the cardholders’ accounts.
Most debit cards require a Personal Identification Number (PIN) to be used to verify the
transaction.
13. Home banking
Home banking is the process of completing the financial transaction from one’s own home as
opposed to utilizing a branch of a bank.It includes actions such as making account inquiries,
transferring money, paying bills, applying for loans, directing deposits.
14. Online banking
Online banking is a service offered by banks that allows account holders to access their account
data via the internet. Online banking is also known as “Internet banking” or “Web banking.”
Online banking through traditional banks enable customers to perform all routine transactions,
such as account transfers, balance inquiries, bill payments, and stop-payment requests, and some
even offer online loan and credit card applications. Account information can be accessed
anytime, day or night, and can be done from anywhere.
15. Mobile Banking
Mobile banking (also known as M-Banking) is a term used for performing balance checks,
account transactions, payments, credit applications and other banking transactions through a
mobile device such as a mobile phone or Personal Digital Assistant (PDA),
16. Accepting Deposit
Accepting deposit from savers or account holders is the primary function of a bank. Banks accept
deposit from those who can save money but cannot utilize in profitable sectors.
People prefer to deposit their savings in a bank because by doing so, they earn interest.
17. Priority banking
Priority banking can include a number of various services, but some of the popular ones include
free checking, online bill pay, financial consultation, and information.
18. Private banking
Personalized financial and banking services that are traditionally offered to a bank’s digital, high
net worth individuals (HNWIs). For wealth management purposes,HNWIs have accrued far
more wealth than the average person, and therefore have the means to access a larger variety of
conventional and alternative investments.Private Banks aim to match such individuals with the
most appropriate options.

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