Banks were originally created as depositories for paper money. Today, the functions of these organizations are much broader. Banks not only participate in money circulation, finance and lend to industrial and trade enterprises, but also carry out deposit insurance, trade securities, act as intermediaries and even manage property. Sometimes their activities are so varied that the question of what is their real essence involuntarily arises.
Any bank is an enterprise and has all the rights of a legal entity with different forms of ownership. It manufactures and markets financial products and services. Bank-specific services include deposit, credit and settlement transactions.
Deposit services are called services for the placement and storage of depositors' funds. They are associated with the original purpose of the bank - safe and secure storage of savings and valuables. Today, banks ensure not only the safety of deposits (deposits), but also receive income from them in order to prevent depreciation from inflation. For the fact that the bank's clients keep their funds in it, they receive interest on the amount of the deposit.
However, lending is often the main activity through which the bank, as a company and an economic entity, makes a profit. By providing legal entities and individuals with funds at interest for a certain period, banks stimulate the development of industry, production of goods and services, participating in the production and financial activities of enterprises and organizations.
Banks also act as intermediaries in settlement transactions both in cash and non-cash forms. According to the client's instructions, they can open various current accounts from which various payments are made: for taxes, wages, and others related to the sale and purchase of material values. At the same time, the bank is an intermediary between its client and the buyer or seller, tax authorities, and the budget. The efficiency of the bank's work is ensured by the latest technologies that make it possible to make settlements and transfer funds in almost real time.
In addition, banks provide additional services on a paid and free basis. Among them - consultations, mediation, trust operations, representing the client's interests in court, surety and guarantees, as well as services to enterprises aimed at their development - public offering of shares, exchange services, etc. them into profitable, working assets.
