TYPES OF BANKS

Althow we broadly defined bank as an institution that accepts deposits and provides lones of various kinds, this defination does not capture the types and nature of various service and products that bank performs. It, therefore, should be make cliear what type of functions that a banks performs, what are the services and products that it can provide to the custumer and to what extent and area it can make financial teansactions. Based on the nature of the services, capital based and coverage of the area banks can be classified into following majour types.

CENTRAL BANK


The central bank is an apex institution to regulate, supervise and facilatate the overall banking system of the country. It servs as the bankers' bank and economic as well as financial advisor to the government. Every country has its own central bank like Nepal Rastra Bank, Reserve Bank of India, Federal Reserve Bank (USA) Bank of Japan etc. It is established for achiving some predetermine objectives such as maintaning price stability, promoting higher economic groth and emploment,exchange rate stability etc.the main objective of the central bank is to servs as the nation as an apes institution to manage the overall banking system rather than earning profits.


COMMERCIAL BANK


The history of banking evolved through the establishment of commercial bank which is the oldest form of bank. It is basically a profit making financial institution that accept deposits and provides lones to customers. Thus, commercial bank is mainly motivated by the profits. It can earn through the difference between the interest on loans and deposits and various customers services. in principle, commercial bank is established for providing short term loans to the bussenessmen. However, the mordern commercial banks performs a number of functions such as consumer leading, industrial financing,foreign exchange operations, ans various others customers services that go beyond the supply of short term loans.

DEVELOPMENT BANK


Developments banks are the specialised financial institutions that are set up to provide loans for development purpose in the various sector like ageiculture, industry,service etc. The development bank also performs almost the developmental activities and have relatively limited scope of their banking activities than commercial banks.

INDUSTRIAL BANK


Industrial bank are those specialized financial institutions which are established for the development of industrial sectors through various way such as by providing loans, directly investing for establishing or modernizing some partivular industry, dealing with the sale and purchase of the share bonus or debentures of industrial establishment, etc.

FINANCIAL COMPANY


Financial companies are those institutions particularly engagde in small and short term consumer financing. The finance companies can accept deposit and extend short term consumers loans with limited amount specified by the central bank directives. The financial companies are small in size in term of the capital and assets so that they can be estabilished in the regional level where other banking institutions are not avaliable.

MICRO CREDIT INSTITUTION


Micro credit bank is a financial institution which is set up with the specific objective of providing financial services in the rural area particularly focusing on the finalncially backward group, sector ans area of the economy. The concept of micro credit institution is developed by prof. Mohamad Yuns of Bangladesh who received the Novel Prize in 2006 for his outstanding contribution in the society through his model of grameen Bikash Bank.

POSTAL SAVING BANK


In order to accumulate the scattered savings from small depositers the postal saving banks operate their services from the branch of post offices. These saving banks collect deposits from the small depositers who do not have easy access to other banking institutions in rural areas. However, the postal saving banks in development countries perform almost all banking transaction like commercial banks.