What are the primary differences between different types of

What are the primary differences between different types of banks (savings, commercial, investment, contractual, intermediary, national, credit unions, etc.)? Discuss in detail. How are insurance companies acting in the capacity of banks?

Solution

commercial banks offers different fee based services and fund based services with a moto of getting profit.

savings banks established with a moto of pooling the money from the people who are having surplus, and use it to correct purpose. here the bank does not works for profit moto, they play the role of facilitator or mediator.

investment banking is the process where the funds are going to be invested in different kind of assets to earn profits and portion of that profits shall distribute to the investors. even these bankers can provide the services of merchant banking, underwriting, lead managers to an issue and so on. they works for profit only.

there are no banks like contractual banks.

intermediary is the person who acts in between two or more parties to complete a task. in this example banks act as intermediary by collecting money from the areas of surplus and lending it to the areas of deficit.

national banks are started with a moto of supporting the primary sector in the nation. usually they gives first priority to agriculture sector and they represents the view of governments.

insurance agencies play a role in the area of risk and covering the risk. they collects money from diferent people as insurance premium and invest in other places and use the returns to pay the claims. they collects money and lend it in the form of investment in other companies. it is one of the primary activity of a bank, but these people can not issue DDs or Cheques.