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Bangalore University 2nd Sem BLO Study material Updated!!

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The term bank is either derived from old Italian word banca or from a French word banque
both mean a Bench or money exchange table. In olden days, European money lenders or
money changers used to display (show) coins of different countries in big heaps (quantity) on
benches or tables for the purpose of lending or exchanging.People earn money to meet their day to day expenses on food, clothing, education of children, having etc. They also need money to meet future expenses on marriage, higher education ofchildren housing, building and social functions. These are heavy expenses, which can be met
if some money is saved out of the present income. With this practice, savings were available
for use whenever needed, but it also involved the risk of loss by theft, robbery and other

A bank is a financial intermediary that accepts deposits and channels those deposits into
lending activities, either directly or through capital markets. A bank connects customers with
capital deficits to customers with capital surpluses.A bank is an institution which deals with money and credit. It accepts from the public,makes the funds available to those who need them, and helps in the remittance of money
from one place to another.A bank is a financial institution which deals with deposits and advances and other related
services. It receives money from those who want to save in the form of deposits and it lends
money to those who need it.


Oxford Dictionary defines a bank as “an establishment for custody of money, which it pays
out on customer’s order.”
According to Crowther, a bank “collects money from those who have it to spare or who are
saving it out of their incomes, and it lends this money to those who require it.”



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