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Last updated on: June 13, 2025

Quick Summary

Banking is a financial system involving institutions like banks and credit unions that manage money, offer loans, accept deposits, and facilitate payments. Modern banking evolved from ancient practices to today’s diversified services like retail, commercial, investment, and central banking. Banks profit by earning interest on loans while paying interest on deposits. Services include deposits, lending, and digital payments. Popular banking products include personal, home, gold, and car loans—each serving different financial needs. Credit cards enable secure, cashless purchases with added benefits like rewards and interest-free periods. Fincover assists users in selecting the best credit cards from India’s top banks.

Banking Overview

Banking refers to the system of financial institutions such as banks, credit unions, and other intermediaries that provide various services related to money management, lending, borrowing, and investing. It encompasses a wide range of activities aimed at managing financial resources, facilitating transactions, and offering financial products and services to individuals, businesses, and governments.

What is Banking?

Banks borrow money from individuals or entities and lend it to others. They operate under legal licenses and provide payment systems through cheques, credit cards, internet banking, and more.

When a bank accepts deposits, it borrows money from customers. Lending money through loans constitutes its lending function. The difference between interest earned on loans and interest paid on deposits, after expenses, forms the bank’s profit.


History of Banking

Early Banking Systems

Banking traces back to ancient civilizations like Mesopotamia, Egypt, and Greece, where lending and borrowing primarily revolved around grain loans and trade.

Development of Modern Banking

The Renaissance era marked a pivotal shift with the rise of modern banks, especially in Italy, such as the Medici Bank, which pioneered various banking techniques and systems.


Types of Banking

Retail Banking

Retail banking serves individuals and small businesses, offering savings and checking accounts, loans, mortgages, and credit cards.

Commercial Banking

Commercial banks provide services to larger businesses, including loans, credit lines, and treasury management.

Investment Banking

Investment banks specialize in raising capital for companies, mergers and acquisitions, and advisory services.

Central Banking

Central banks regulate the money supply, set interest rates, and supervise commercial banks to maintain economic stability.


Banking Services

Deposit Services

Banks offer savings, checking, and term deposit accounts, allowing customers to save money and earn interest.

Lending Services

Lending includes personal loans, mortgages, business loans, and more.

Payment Services

Banks facilitate transactions through credit/debit cards, online transfers, and mobile payments.


Our Banking Products

a) Loans

A loan is borrowed money that must be repaid with interest. Terms such as interest rate, tenure, and repayment schedule are pre-agreed. Many loans are purpose-specific and secured by collateral.

Personal Loan

An unsecured loan for personal needs, offered by banks or NBFCs, available in short- or long-term durations.

Home Loan

Loans for constructing or buying a home, secured against the property.

Gold Loan

Loans against gold or jewellery as collateral; the amount depends on gold value.

Car Loan

Loans to purchase new or used vehicles, with the vehicle as collateral.

Short Term Loan

Loans with a tenure of one year or less, suitable for short-term financial needs.

Property Loan

Loans secured by mortgaging property for various financial purposes.

b) Credit Cards

Credit cards enable cashless transactions online and offline. They provide a credit period (usually 2–7 weeks) to pay back, along with rewards and cashback offers. Sellers often provide discounts for credit card transactions.

At Fincover, we help you choose from India’s leading banks’ best credit cards.