What Does Banking And Finance Mean?

Bank deals in money and credit. A bank is a factory manufacturer of credit. Bank get money from the people on low rate of interest and gives loans to industrialists and businessmen on high rate of interest. The difference between accepting deposits and issuing loans is profit of the bank.

The commercial banks work on commercial basis. The aim of the bank is to earn profit. On the other hand the aim of central bank is not to earn profit, but to regard the supreme interest of the country.

Finance is the blood of business. In modern time, it is not possible to start business activities without the availability of adequate finance. Business enterprise requires funds for the creation of fixed capital i.e. land, building, machinery and for the purchase of man power, raw material, energy etc.

Business finance means anticipation acquisition and allocation of funds.
Business finance is defined as that business activity which is concerned with the acquisition and conservation of capital funds in meeting the financial needs and overall objectives and business enterprise.

The success and failure of business in private sector is linked with finance. Business without finance is a just like a fish out of water. For proper working of assets, repair renewal and maintenance is necessary. This work cannot be done without finance.