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Introduction & Definition

[span_0](start_span)Today, banks not only keep your hard earned money safe but also provide various other services and facilities that can enhance your financial planning[span_0](end_span). [span_1](start_span)A Bank is defined as a financial institution capable of receiving deposits and providing loan facilities to eligible customers[span_1](end_span).

Types of Banks

Commercial and retail banks
Investment banks[span_2](end_span)

Regulation

Banks are generally regulated by the central government or central bank. [span_3](start_span)For example, The Reserve Bank of India (RBI) regulates all retail banks in India[span_3](end_span). [span_4](start_span)The Central bank deals with commercial banking functions, meaning individual customers cannot open accounts there[span_4](end_span).

Structure of a Bank

The fundamental functionality of a bank is divided into Assets and Liabilities.

[span_5](start_span)Visualizing the relationship between Assets (Loans) and Liabilities (Deposits)[span_5](end_span)

Loans & Advances (Assets)

Bank assets help the business grow. [span_6](start_span)While advances are short-term credit facilities, loans are generally long-term debts[span_6](end_span).

Cash Credit (CC)

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A short-term source of financing/loan extended to a company by a bank[span_7](end_span).

Overdraft

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A credit agreement allowing an account holder to withdraw more money than available, up to an approved limit[span_8](end_span).

Discounting of Bills

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A facility where a holder of a bill of exchange gets the bill discounted (paid) by the bank before maturity for a fee[span_9](end_span).

Deposits (Liabilities)

Deposits are liabilities for the bank because they owe this money back to customers.

Current vs. Savings Account

[span_10](start_span) [span_11](start_span) [span_12](start_span) [span_13](start_span) [span_14](start_span)[span_15](start_span) [span_16](start_span)[span_17](start_span) [span_18](start_span)[span_19](start_span) [span_20](start_span)

Feature	Current Account	Savings Account
Purpose	Perform huge numbers of transactions[span_10](end_span)	Promote savings for lower/middle income[span_11](end_span)
Ideal For	Businessmen[span_12](end_span)	Salaried individuals[span_13](end_span)
Interest	Not eligible[span_14](end_span)[span_15](end_span)	Offers nominal interest[span_16](end_span)[span_17](end_span)
Overdraft	Eligible[span_18](end_span)[span_19](end_span)	Not eligible[span_20](end_span)

Fixed Deposits (Term)

Lock-in: Amount cannot be withdrawn before maturity without penalty[span_21](end_span).
Interest: Higher than savings; taxable if income > ₹10,000[span_22](end_span)[span_23](end_span).
Senior Citizens: Often get 0.25% - 1% higher rates[span_24](end_span).
Premature Withdrawal: Allowed but subject to 0.5% - 1.5% penalty[span_25](end_span)[span_26](end_span).

Recurring Deposits (RD)

Concept: "Little drops make an ocean." [span_27](start_span)Monthly installments for a fixed tenure[span_27](end_span).
Tenure: Min 6 months, Max 10 years[span_28](end_span).
Min Amount: Usually ₹10/month or ₹500/month depending on bank[span_29](end_span)[span_30](end_span).

The ATM Ecosystem

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ATMs in India operate under the National Financial Switch (NFS), connecting over 236,199 machines[span_31](end_span).

History

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India's first ATM was set up in 1987 by HSBC in Mumbai[span_32](end_span). [span_33](start_span)Later, networks like CashTree and Cashnet were formed to share infrastructure[span_33](end_span).

Indicash (White Label)

Tata Communications launched "Indicash," the first White Label ATM (non-bank entity) network. [span_34](start_span)[span_35](start_span)It focuses on semi-urban and rural areas (67% deployment)[span_34](end_span)[span_35](end_span).

Special ATMs

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Floating ATM: Launched by SBI on a Jhankar ferry in Kerala[span_36](end_span).
[span_37](start_span)High Altitude: SBI set up an ATM at Leh (16,000 ft) for army personnel[span_37](end_span).

Functions of a Bank

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The most important function is Accepting Deposits (Current, Savings, FD, RD) which are repayable on demand[span_38](end_span).

Interest Rate Data (Snapshot)

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Note: Rates are based on historical data provided in the document[span_47](end_span).

Fixed Deposit Rates

[span_48](start_span) [span_49](start_span) [span_50](start_span)

Bank	General Rate	Senior Citizens
SBI Bank	5.00% - 6.80%	5.50% - 7.30%[span_48](end_span)
ICICI Bank	4.00% - 7.10%	4.50% - 7.60%[span_49](end_span)
HDFC Bank	3.50% - 7.30%	4.00% - 7.80%[span_50](end_span)

Recurring Deposit Rates

[span_51](start_span) [span_52](start_span) [span_53](start_span)

Bank	Regular Account	Senior Citizens
HDFC Bank	6.25% - 7.25%	6.50% - 7.75%[span_51](end_span)
SBI Bank	6.70% - 6.85%	7.20% - 7.35%[span_52](end_span)
Bandhan Bank	6.40% - 7.10%	7.15% - 7.85%[span_53](end_span)

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