2. ‘Bank 'is usually used in the sense of commercial bank.
Bank seems to have originated from the Germanic
word ‘bank’—joint stock fund or heap.
French word ‘banque’and the Italian word ‘banco’
3. The Italian word banco refers to a bench at which the
money changers used to change one kind of money
into another
The first public banking –the Bank of Venice (1157)
The bank of Barcelona and the Bank of Venice –1401
and 1407 respectively.
4. Exchange banking was developed after the installation
of the Bank of Amsterdam in 1609 and Bank of
Hamburg in 1690.
The credit of laying the foundation of modern banking
in england goes to the Lombards of Italy
The bankers of lombardy –money lending business in
england
5. The bank of England -1694
The development of joint stock commercial banking
started functioning in 1833.
Modern banking developed in 19th century.
In India ,the first modern bank ‘bank of Bengal’ in
1806
6. Central bank
Commercial bank
Apex institution of the monetary and It is only a constituent unit of the
banking system
banking system
Monopoly of note issue
Do not have this right
Not profit making institution ,but to
promote economic policy of the
government.
It is to earn profit for the
shareholders
It maintain foreign exchange of the
country
It deals with foreign exchange under
the guidance of central bank
It is the advisor, banker to the
government
It is the banker, advisor to the public
7.
8.
9.
10.
11. Regulator of currency
Banker ,agent and adviser to government
Custodian of cash reserves of commercial banks
Custodian and management of foreign exchange
reserves
Leader of the last resort
Clearing function
Controller of credit
12. Bank rate
Open market operation
Variable reserve ratio
Qualitative /selective credit control
Margin requirements
Regulation of consumer credit
Rationing of credit
Direct action
Moral suasion
publicity
14. Creation of money for credit
• Other function
transfer of funds
Agency function
General utility services
Safty lockers
Letter of credit
Under writing loans
Compiling statistics
