Banking is a profession and practice that has existed for long. Most people go to banks to deposit money, and withdraw it, but they really do not know the basic functions of banks. Some of the basic and important functions of banks are to assemble capital and make it effective, receive deposits and make collections, to check out and transfer funds, and to lend or discount. Banks may also issue circulating notes, and exercise fiduciary or trust powers.

Any bank which expects to perform well must first and foremost prove its worth to the community. Banks are equipped to utilize funds for short and long term period of time, and with some profit to it. By obtaining deposits from individuals and corporations, banks acquire reservoir of funds, and from these, they can make loans and other investments from time to time.

When banks receive deposits and make collections, they save depositors much personal effort. For example receiving or depositing a check which is payable in another place which may be hundreds of miles away would be tiresome and time consuming. But banks can convert that check within a short time into cash or the depositor’s use, and they do so for a small fee. Banks also save customers a lot, by accepting promissory notes, drafts, and actually other negotiable papers in similar ways. When banks provide their customers with book or a check, they help them withdraw and transfer funds quickly and efficiently. This means if a depositor happens to owe someone money, they do not have to go to the bank and withdraw cash, then repay the debt. They can simply write a check with an order to the bank, which I represented at the bank and the one owed the money paid his debt.

Banks are important institutions within the community, and surely help in making life easier by simplifying transactions.

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