Business Banking : Meaning

What is a business bank?
A business bank is a type of fiscal conciliator that offers checking, savings and monetary market accounts. Business banks in India approve time deposits and loans to traders, clients and non-profit making organizations. Previously, business banks were restricted to approving cash deposits or valuable for safeguarding and validating currency or swapping one authority's currency for another's.

The banking scenario changed in seventeenth century when the fundamentals of contemporary banking, engaging foreign currency exchange, imbursement of the rate of interests, authorization of loans, were introduced. It became usual for people and organizations to trade investments via bankers with a printed draft, the forerunner to the recent cheque book. As some of the business banks are required to possess only a proportion of its investment as cash deposits, it can utilize some of the cash stored by its clients to extend loans.

Various Channels of Business Banking

Business Banking is done through various channels which are mentioned as below:

• Business Banking via Branch: A branch is a banking or fiscal centre that is recognized as the retail outlet where the fiscal institution provides diverse range of personal facilities to its clients.


• Business Banking via ATM: An ATM is automated telecommunications equipment that offers a bank’s clients a technique of monetary operations in a community space sans the requirement for a bank teller. Most business banks in India are now offering wider assortment of facilities through its ATM outlets. One of the major services of ATM is cash deposits by simply inserting currency inside the device and entering the account details in which the money needs to be credited.


• Business Banking via Telephone: This facility is offered by a bank that permits its clients to execute cash transactions over the phone. This generally entails receipt imbursement for bills from chief billers.


• Business banking via Internet: This phase is referred for executing operations, payments, etc via online through a financial union or an official website.


• Business banking via Mobile: This is a technique of utilizing one's cell phone to perform easy banking operations by tenuously connecting into a banking set-up.


• Business banking via Video: This is a phase used for executing banking operations or specialized banking sessions through a distant video and audio link. Video banking can be accomplished through intentional constructed banking transaction devices or videoconference facilitated by a branch.


• Business banking via Mail: This method can be used to deposit cheques and transfer bank orders by enclosing the document in an envelope. At times even financial institutions use mail service to distribute intermittent account transactions to its clients.

Business Banking Activities

Business banking generally entails the following activities:

• Business banks processes fee through telegraphic transmit, net banking, EFTPOS, etc
• It sanctions cash on term deposit
• It issues cheque books and drafts
• It provides loan amount through monthly installments, overdrafts, etc
• It protects official certificates and other valuables in safe deposit containers
• It offers standby finance documents, collaterals, performance bonds, securities bankrolling vows and other kinds of balance sheet disclosures
• It trades and allocates, insurance and other fiscal plans
• It provides cash supervision and reserves facilities
• It involves commercial banking and private equity sponsoring

Last Updated on 20^th May 2010