Banking Transactions

Banking transactions means all receipts and payment made through bank.

Large payment made through cash is risky and inconvenient.

In most of the developed countries, large amount cannot be paid through cash.

All receipts and payment are done through bank in modern business.

Firm issues cheque for making payments accepts cheques for getting amount.

Firm instruct its bank to pay and collect amount on behalf of firm.

Generally, large amount is paid through cheque except petty cash account in the office of a modern business.

Meaning of Bank

Bank is a financial institution and financial intermediary.

Bank accepts deposit and provides these deposits to lending (loan) activities.

Lending is provided either direct or through capital market.

A bank is the mediator between customers that have capital deficits and customers with capital surpluses.

Banks are one of the major financial intermediaries.

Their primary function is to transfer of funds from the savers to users.

Commercial bank accepts both time deposit and the demand deposit.

Commercial banks are an important source of short term loan.

Commercial banks are the major financial intermediaries.

Development bank creates the proper environment in the country for the development of rural area, industrial and agricultural area of the country.

The main objective of the bank is to earn maximum profit.

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BASIC JOURNAL ENTRIES IN NEPALI http://tiny.cc/uaakkz

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Keep in Mind (KIM)

Origin of Bank

The word bank was borrowed from French word banque, from Italian word banca.

One of the oldest banking items coin found in 350 – 325 BC.

It was a silver Greek drachm coin.

It was found in ancient Hellenic Colony Trapezus on the Black Sea (now Trabzon or Turkish).

This coin is presented in the British Museum in London.

The coin shows a banker’s table (trapeza) laden with coins, a joke on the name of the city.

Even today the word Trapeza (Τράπεζα) means both a table and a bank in Modern Greek.

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