Definition of Offshore banking

It refers to the banking system which is set up in specially demarcated zones which are separate from the domestic banking system and which raised funds for its operation from offshore or non-resident sources for investment in domestic and or third country projects.

It also refers to the banking operations that cover only non-residents and do not mix with the domestic banking. An off shore banking centre is a place where deliberate attempt is made to attract international banking by offering many concessions in the form of taxes and levies being imposed at lower rates or not being charged.

Definition of Merchant banking

A merchant bank may be considered as an institution which centers its operation on all or mostly in management of issue of various securities traded in stock exchange, underwriting, project counseling, corporate counseling in areas of capital restructuring or effective management of finance, amalgamations, mergers, takeovers, technical consultancy services, portfolio management, investment management, equipment leasing and providing venture capital etc.

Definition of Mixed banking

Commercial banking and investment banking combined together is referred to as mixed banking. These two types of banking are completely different from each other. Commercial banks are engaged in short-term financing while investment banks are engaged in log-term financing. Commercial banks’ deposits are of short duration and payable on demand or short notice.

Definition of Investment banking

Investment banks are institutions which assist commercial organizations in raising long-term capital through the sale of shares, stocks, debentures and bond. It is a system where banks arrange long-term funds for business and industry. They work both as financiers as well as underwriters. As financiers they themselves provide long-term funds to business and industry.

Distinguish or difference between bank and banking

Bank

Bank is a financial institution that accepts the surplus money of the people in the form of deposit and gives it to other in the form of loans and advances.

According to professor Chamber, “bank is an office or institution for keeping, lending and exchanging etc of money.”

Banking

Banking is the process of performing the activities of a bank.

Role of ancestors in the development modern banking: Money-lender

Moneylenders have a great contribution on the development of modern banking. The factors influenced moneylenders to join with the banking business are as follows-
1. As moneylenders were rich, everyone trusted them.
2. They had a power of influencing and /convincing anyone.
3. They took the deposited money and provided loan to poor people.

Role of ancestors in the development modern banking: Merchant

As the merchants were engaged with money transaction, it may be said that they had a great contribution on the development of bank. Adam Smith compared the Merchants to “Financial Company’. That time, the situations which were in favor of the development of banking system for the merchant were as follows-

1. Merchants were rich people of the society.

2. For their own sake they were honest.

Role of ancestors in the development modern banking: Goldsmith

The role of goldsmith regarding the development of modern bank was very important. Due to their business nature and character they were well-reputed person at that time. People kept their valuable goods to them because-

1. They were socially treated as honest, truthful and ethical.

2. They were financially rich.

Role of ancestors in the development modern banking

Ancestors & modern Banker are the persons who played a contribution on the development and evaluation of modern banking.
According to Prof. G. Crowther- “The present day bankers has three ancestors ‘Goldsmith’, “Merchant’, and ‘Money-lenders’.” According to the definition mentioned above the ancestors are classified as follows-

Historical evolution of banking

It is very difficult to say the historical evolution of Bank. But it is sure that the development of Bank is performed step by step. From the view of a specialist we can say- “The birth of present day banking is not sudden; it has come to its present stage through a process of development.”