Deposit Banking
Pure deposit banking has its origin in England. Banks in England were only confined to accepting deposits and lending for short periods to industries and trade.
Receiving deposits and making advances for short period is called deposit banking. The underlying principle of this system is that banks can not lock up their deposits in long-term investment, as the deposits are repayable on demand. Banks were custodians as well as trustees to keep safe the deposits of the public. This principle made them completely free from supplying fixed capital requirement of industries.
Category: Banking & Finance
Previous: ← Chain Banking
Next: Mixed Banking →
More from this Section
- Portfolio diversification
Portfolio diversification is the spreading out a bank’s credit accounts and deposits ... - McCarran-Ferguson Act
McCarran-Ferguson Act is a federal law passed in 1945 stating that continued regulation ... - Beta
Beta is the second letter of Greek alphabet, used as a statistical measure of risk in ... - Other-than-collision loss
Other-than-collision loss is a part of the coverage available under Part D: Coverage for ... - Family purpose doctrine
Family purpose doctrine is a concept that imputes negligence committed by immediate family ...