What is Banking
Learn what do we mean by banking.
Banking Industry is a service industry. It provides various services to its customers. Traditionally the services were restricted to deposits and loans. The started by taking deposits from people who had surplus of money and lending this money to borrowers who wanted money to invest. They charged interest from borrowers and gave interest to depositors. There was difference in rate of interest between deposits and lending and that constituted the major source of revenue for banks.
Banking is a service industry providing services to those who want to lend, borrow or invest. This is putting it as simply as possible. Banking started like this, but today banking industry is one of the most complex and hugely diverse industries and offers a portfolio of large number of services.
Now a days banks are large and complex organizations. Their clients range from individuals and corporate institutions, other banks and governments of entire nations. Banking is a service industry, means that they don't produce physical things but provide services to their clients. The deal with all types of money transactions, borrowing it, lending it, and many other related activities that are explained in this tutorial.