Definition of Banks and Types


Bank Definition

According to Republic of Indonesia Law Number 10 of 1998, Banks are business entities that collect funds from the public in the form of deposits and distribute them to the public in the form of loans and / or other forms in order to improve the lives of many people.

Types of Banks

  • Central Bank

is a bank whose job is to issue paper and metal money as a legitimate payment instrument in a country and maintain the conversion of said money to gold or silver or both.

  • Commercial Banks

is a bank that not only can lend or invest various types of savings obtained, but also can provide loans from creating own demand deposits.

  • Rural Bank (BPR)

is a bank that conducts business activities conventionally or based on sharia principles which in its activities do not provide services in payment traffic.

  • Islamic Bank

is a bank that operates based on the principle of profit sharing.

Such is the definition of a bank and its types.


Read Also:

Definition of Savings

Definition of Giral Money

Definition of Deposits

Definition of Current Account

Bank functions

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