Bank Deposit Accounts

The first function of commercial bank is to receive deposits. Usually, the customers can deposit their money in several kinds of bank accounts. Some of them are as follows:

1) Fixed Deposit Account: This account is opened for a definite period of time without the expiry of which the amount cannot be withdrawn. The rate of interest is higher than that of savings account. The greater the period for which money is deposited the higher the interest rate is offered.

2) Savings Account: It was introduced by the banks for those who have low incomes and small savings. Those who open it include students, salaried persons, and small traders.

3) Current Account: It is the most popular form of bank account. Current account is operated by businessman. In this account the customer is authorized to deposit or withdraw money any time in or from the bank. The bank does not pay any interest.

Customer

It is clearly established that the word “customer” generally denotes a relationship resulting from habit or continued dealings, but for a bank customer this habit of dealing is not essential. The person who has an account with a bank is known as an account holder or customer of that bank.

According to Lord Lindly:
“A customer is a person who has some sort of account, either deposits or current account or same other relationship with a banker.”

According to Dr. Hart:
“A customer is one who has an account with a banker or for whom a banker habitually undertakes to act as such.”

What is Demand?

The word ‘demand’ is used as a term in Economics. Common meaning of word ‘demand’ is ‘desire’ but there is a difference in ‘desire’ and ‘demand’ as a term in Economics. If any thing is desired only, it will not be called demand in Economics. The desire, to become a demand, should have the backing of purchasing power or money.

The desire to purchase any thing depends on the demanded price of the commodity. The higher is the price, lower will be the demand. On the contrary, the lower is the price lesser will be the demand. No one can decide about the quantity or amount of a commodity to purchase so long he does not know about the price of the same.

The price that a buyer wants to pay for a certain quantity of a commodity is called ‘Demand Price’. The term ‘Demand’ may be defined as “The human desire of a commodity is called Demand which has support of purchasing power.”

Credit Control

Credit control is one of the principal functions of the central bank. Credit money expands through commercial banks by means of cheques. Credit plays an important role in maintaining and changing the price level as a medium of exchange. It is the responsibility of the central bank to regulate the volume of credit and its direction to maintain stability of the price level.

Credit control means, regulating the volume and direction of bank loans. On the volume of credit depends largely the level of employment and the level of prices in the country.