Bank

Article

December 7, 2021

A bank (Indonesian pronunciation: [bang]) is an intermediary financial institution that is generally established with the authority to accept deposits, lend money, and issue promissory notes. The word bank comes from the Italian word banca which means a place to change money. Meanwhile, according to the banking law, a bank is a business entity that collects funds from the public in the form of savings and distributes them to the public in the form of credit and or other forms in order to improve the standard of living of the people at large. At first, the bank was a collection of traders who would lend seeds to farmers or traders who brought goods. The banking industry has undergone major changes in recent years. The industry is becoming more competitive due to regulatory deregulation. Today, banks have flexibility in the services they offer, the locations in which they operate, and the rates they pay for depositors. Banks can be defined as business entities that collect funds from the public in the form of savings and distribute them to the public in the form of credit or other forms in order to improve the standard of living of the people at large. Digitization is also disrupting the banking sector, where we see a transition from distribution networks: branch offices (physical), telephone banking services (analog), internet services and mobile banking (digital).

Understanding

Etymologically, the word "bank" comes from the French banque or Italian banca which means bench. Florence's bankers during the Renaissance carried out their transactions by sitting behind a money changing desk, in contrast to the work of most people which did not allow them to sit while working. three activities, namely raising funds, channeling funds, and providing other bank services. The activity of collecting and distributing funds is the main activity of the bank, while providing other bank services is only a supporting activity. Activities to raise funds, in the form of collecting funds from the public in the form of demand deposits, savings, and time deposits. Usually while being given attractive rewards such as flowers and gifts as a stimulus to the community. Activities to channel funds, in the form of providing loans to the community. Meanwhile, other banking services are provided to support the smooth running of these main activities. Some of the benefits of banking in life are: As an investment model, which means, derivative transactions can be used as an investment model. Although in general it is a type of short-term investment. As a way of hedging, which means, derivative transactions can serve as a way to eliminate risk by way of hedging, also known as risk management. Price information, which means, derivative transactions can serve as a means of finding or providing information about the prices of certain commodities in the future. Speculative function, which means, derivative transactions can provide opportunities for speculation (chance) on changes in the market value of the derivative transaction itself. The production management function runs well and efficiently, which means that derivative transactions can provide an overview to the production management of a producer in assessing future market demand and needs. attention to the banking world, is the philosophical goal of the existence of banks in Indonesia. This is very clearly reflected in Article four (4) of Law Number 10 of 1998 which explains, "Indonesian banking aims to support the implementation of national development in order to increase equity, economic growth,

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