Bank Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Bank, written in plain English, along with examples of how it is used.
What is Bank?
(n) Banks are the institutions constituted as per the law of land, engaged in services related to financial transactions including accepting of money from the public, dealing with money owned by others, lend money to the public for a charge etc.
History and Meaning of Bank
The term "bank" has its roots in the Italian word "banca," which means bench. In the Middle Ages, moneylenders in Italy conducted their business sitting on benches in the marketplaces. When a moneylender ran out of money, he would break his bench, or "banca rota." Therefore, the term bankrupt came into use.
Banks have been around since ancient times, and the concept of holding and lending money has been an essential part of human civilization's economic development. Banks offer a wide range of financial services, from checking and savings accounts to credit cards and loans.
Examples of Bank
- By depositing money in a bank, customers can earn interest on their savings.
- To withdraw cash from an ATM, customers must enter their PIN.
- A bank may offer a mortgage to a qualified borrower to purchase a home.
- A bank’s board of directors decides on the bank's strategic direction and reviews its performance.
- Banks can also issue travelers' checks, money orders, and cashier's checks.
Legal Terms Similar to Bank
- Credit Union - Similar to banks, credit unions offer financial services to their members, such as savings and checking accounts, loans, and mortgages. However, unlike a bank, a credit union is a not-for-profit organization owned by its members, and they offer a more personalized experience.
- Central Bank - Central banks are financial institutions responsible for overseeing a country's monetary system. They regulate the supply of money, interest rates, and banks operating within their jurisdictions.
- Investment Bank - Investment banks provide complex financial services, such as underwriting new securities issuances, mergers, and acquisitions, and trading securities for clients. However, unlike a commercial bank, which accepts deposits, investment banks do not accept deposits from the public.