ICom Notes Class 12 Banking Kinds of Banks

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Kinds of Bank

Some important types of banks are as follows

i. Central Banks.

This bank is of great significance in the banking system of a country. Central Bank is considered as the Bank of government and directly or indirectly control the activities of all the banks operating in the country. State Bank of Pakistan is the central bank of Pakistan.

ii. Commercial Bank

This is another most important type of the banking system. It is main function is to receive deposits, advance loans and discounting of bills.

iii. Industrial Bank

 These type of banks provide loans to industries. Generally these banks advance loans for long periods.

iv. Agricultural Bank

The main functions of these banks is to provide loans for long and short periods to the agriculturists. Long period loans are used for acquisition of and improvement of land while short period loans is used for purchasing seeds manures and for current expenditure.

v. Exchange Bank

These banks deal in foreign currencies in the form of bill of exchange, drafts, telegraphic transfers etc. They buy and sell foreign currencies.

vi. Saving Bank

Saving Banks provide incentives to people of small means to save money. These banks provide monetary facilities to the people.

vii. Land Mortgage Banks

These banks are meant to provide loans to agricultural by mortgaging their lands. An agricultural has to mortgage his his land if he wants to take loan from this particular type of a bank.

viii. Co-Operative Bank

Such type of banks are usually run by co-operative societies through its members. These are non-scheduled banks. They are meant for the benefits of the society and its members.