History of banking Among many other things, the Code of Hammurabi from BC recorded interest-bearing loans. Banking began with the first prototype banks of merchants of the ancient world, which made grain loans to farmers and traders who carried goods between cities and this system is known as a barter system.
Modern Banking Definition, Function and Role in the Economy Bank bankPara banking experts in developed countries define banks as profit-oriented financial institution.
To obtain the profit of commercial banks perform the intermediary function. Because diizikan raise funds in the form of deposits, commercial banks also called depository financial institutions. Based on its ability to create money demand depositscommercial banks may also be referred to as the creator of demand deposits of commercial banks.
Understanding of commercial banks under the Act No. Creation of money Commercial bank money is created demand deposits, which means the mechanism of transfer payments clearing. The ability to create demand deposits of commercial banks led possisi and functions in the implementation of monetary policy.
The central bank may reduce or increase the money supply by influencing the ability of banks to create demand deposits. Supports Smooth Payment Mechanism Other functions of commercial banks are also very important is to support the smooth payment mechanism. This is possible because one of the services offered by commercial banks are services relating to the payment mechanism.
Some services are very well known is the clearing, transfer money, receiving deposits, granting the facility of payment by cash, credit, payment facilities are simple and convenient, such as plastic cards and electronic payment systems.
Savings Fund Society collection Funds collected by the most common is the savings bank. Deposit funds in Indonesia consist of demand deposits, time deposits, certificates of deposit, savings or other form that can be equated with it.
Ability to collect funds for commercial banks is much greater than other financial institutions. Deposit funds collected will be distributed to parties in need, primarily through lending. The difficulties of the transaction between two parties of different countries always arise due to differences in geography, distance, culture and the monetary system of each country.
The presence of commercial banks operating on an international scale will facilitate the completion of the transactions.
With the commercial banks, the interest of the parties to international transactions can be handled more easily, faster, and cheaper. Valuable Goods Storage Storage of valuables is one of the earliest of the services offered by commercial banks.
Communities can store valuables such as its jewelry, money, and a diploma in boxes that had been provided by the bank for rent safety box or safe deposit box. The rapid economic development led to the bank to expand services by storing security or securities.
Provision of Services-Other Services In Indonesia, the provision of other services by commercial banks are also more numerous and widespread.
Currently we are able to pay for electricity, telephone buy cellular phone bills, send money via atm, paying the salaries of employees using bank services.
These services are very easy and gives a sense of security and comfort to those who use it.Importance and Role of Banks: Banking plays an important role in the financial life of a business, and the importance of banks can be seen from the fact that they are .
Commercial bank functions described below shows how important the presence of public banks in the modern economy, namely: A. Creation of money Commercial bank money is created demand deposits, which means the mechanism of transfer payments (clearing). The banking sector has embraced the use of technology to serve its client’s faster and also to do more with less.
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