What is a Bank?
Finance is the life blood of trade, commerce and industry. Now -a-days, banking sector acts as the backbone of modern business. The term bank is derived from the French word Banco which means 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 exchaning. 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 deposit and it lends money to those who need it. Definition of a Bank
Section 5(b) of the Banking Companies Act, 1949 defines banking as “accepting for the purpose of lending or investment of deposits of money received from the public, repayable on demand and withdrawable by cheque, draft, order or otherwise”. Features of a Bank
1.Dealing in Money
2.Individual / Firm / Company
3.Acceptance of Deposit
5.Payment and Withdrawal
6.Agency and Utility Services
7.Profit and Service Orientation
8.Ever Increasing Functions
Funtions of Bank
The fuctions of banks are briefly highlighted in following Diagram or Chat.
A.Primary Function of Banks
2.Granting of Loans and Advances:
d.Discounting of Bill of Exchange
B.Secondary Function of Banks
a.Transfer of Funds
b.Collection of Cheques
f.Other Agency Functions
2.General Utility Functions
a.Issue of Drafts and Letter of Credits
c.Underwriting of Shares
d.Dealing in Foreign Exchange
f.Social Welfare Programmes
What is a Debit Card?
A debit card is a plastic card issued by banks to customers. It allows instant purchase, removing the correct balance from the user’s attached bank account. Most debit cards have two features:
•The ability to purchase items at stores that have automated debit card machines •The ability to withdraw cash from a bank account at an automatic transaction machine (ATM) Types of Debit Cards system
The following are found in the front of a typical debit card:
1.Issuing bank logo
5.Card brand logo
7. Cardholder’s name
The following are found in the reverse side of a typical debit card:
3.Card security code
Advantages of Debit Cards
•Money Management and Control.
Debit transactions are deducted directly from a checking account and recorded in one place on a monthly statement. •Security.
Debit cards offer better protections than cash or checks, and Zero Liability means consumers pay nothing for fraudulent purchases. •Acceptance.
Debit cards can be used at millions of locations worldwide, and can be used over the phone and on the Internet. •Convenience.
Debit card transactions are quick and simple, getting you out of the store faster; automatic bill pay via debit eliminates worries about missed payments. •Rewards.
More debit cards are also offering rewards so purchases earn points toward travel, merchandise or even cash.
Federally Imposed Maximum Lianilityfor Unauthorized Card use (United States) ReportedMaximum Card Holder Liability
Credit CardDebit Card
Within 2 business days$50$50
After 2 but before 60 business days$50$500
After 60 business daysUnlimitedUnlimited
Disadvantages of Debit Cards
1.Record keeping is mandatory.
When you’re using a debit card you have to note each transaction so you’re not in danger of over drafting from your account. You also run the risk of severe embarrassment if you’re rejected from a store with a long line of customers behind you. 2.Convenience is not always guaranteed.
If you happen to be at a place that doesn’t take a debit card, then you’re up the creek. It only seems like every store or restaurant takes a debit card. You’re bound to come across a place that won’t take your card at least once or twice a month. 3.Hidden fees are everywhere.
If you’re not using an ATM affiliated with your bank then you’re going to have to pay a fee. On top of that, many banks then charge a foreign ATM fee. These fees can get as high as ten dollars. 4.Internet scams are commonplace.
If you use your debit card to purchase goods online then you have to be careful. Your information can get lost in cyberspace and fall into the wrong hands. 5.Is your card lost or stolen?
This is the worst feeling in the world. You want to believe that nobody would ever do anything wrong with your information, but your card can fall into the wrong person’s hands.
Personal Identification Number
1.To enable the cardholder to use the card, a Personal Identification Number (PIN) will be issued to the customer in the first instance.
2.IOB bank exercises utmost care and caution when issuing the PIN/s and also ensures, to the maximum extent possible, that the same is not disclosed to anyone except the cardholder.
3.The PIN shall be mailed to him and the cardholder shall encure that the same is received in a sealed envelope.
4.This PIN may subsequently, be changed by the cardholder, at his own risk, at any IOB bank ATM or at designated IOB bank branches.
5.The cardholder shall not record the PIN in any form so as to facilitate PIN coming to knowledge of a third party.
6.The cardholder grants express authority to IOB bank for carrying out transactions and instructions authenticated bythe PIN and shall not revoke the same.
7.IOB bank will also not be liable for any consequences connected with the use/ misuse of the card by any third party due to the card falling in the hands of any third party.
8.If any third parties gain access to the services, including the Account, the cardholder will be responsible.