Regarding the meaning of the bank can be sure everyone understood, well studied in school or any school not certainly know the general meaning of the bank. Although not everyone has savings in the bank, but the bank said often encountered in daily life, such as advertising on TV ads that often the bank, or when traveling we see the bank building.
I think we all agree that the short meaning of the bank is a place to save money or to save money, and also a place to borrow money. In this article we will discuss a complete understanding of the bank, from the origin of the word bank, banks in general terms, and the terms of the bank by government legislation shrimp.
The origin of the word is from the Italian bank banca meaning the money changers. In general terms the bank is a financial intermediary which is generally established with the authority to receive deposits of money, lending money, and issue promissory notes, known as the Banknote.
While understanding the bank according to the Law of the Republic of Indonesia Number 10 of 1998 Date of 10 November 1998 concerning banking is a bank is a business entity which collects funds from the public in the form of savings and channel them to the public in the form of loans and or other forms of order to improve the living standard of the people.
From understanding the bank under the Act of the Republic of Indonesia Number 10 of 1998 can be concluded that the banking business covers three activities, namely to raise funds, distributing funds and providing other banking services. Activities of collecting and distributing funds is the main activity, while banks provide banking services only other supporting activities. Fund raising activities, such as collecting funds from the public in the form of demand deposits, savings and time deposits. Usually he is given an attractive remuneration such as, flowers and gifts as incentives for people to be more than happy to save. Activity funds, in the form of lending to the public. While other banking services provided to support the smooth operation of principal.
The existence of the bank would provide benefits to many parties, among other benefits
1. As an investment model, which means that derivative transactions can be used as a model of investing. Although in general are kind of short-term investments (yield enhancement).
2. As a way of hedging, which means that derivative transactions can serve as a way to eliminate the risk by hedging (hedging), also referred to as risk management.
3. Pricing information, which means that derivative transactions can serve as a means of seeking or providing information about a particular commodity prices in the future (price discovery).
4. Speculative function, meaning, derivative transactions may provide opportunities speculation (speculative) to changes in the market value of the derivative itself.
5. Production management functions running properly and efficiently, which means that derivative transactions may give an idea to the management of production of a manufacturer in assessing the demand and future market needs. Apart from banking functions (bank) primary or derivative, then that needs to be considered for the banking sector, is a philosophical purpose of the existence of a bank in Indonesia. It is very clearly reflected in Article four (4) of Law No. 10 of 1998 which explains, “Indonesian Banking aims to support the implementation of national development in order to improve equity, economic growth and national stability towards improving the welfare of the common people”. Reviewing more in the bank business, the bank (banks) Indonesia in conducting its business should be based on the principle of economic democracy that uses the precautionary principle. 4 This is, clearly illustrated, because philosophically bank has the function of the macro and micro process of nation building.