traditiona banking vs modern banking - 1397 Words

ACKNOWLEDGEMENTS I am pleased to convey my sincere acknowledgements to all the people who contributed to the completion of this study. Above all, I thank almighty God who always provides me with proper health and strength and this has contributed much to the completion of my study. Next is my project supervisor, who spent his time, knowledge and skills in guiding me towards successful understanding and completion of the study. To me it has been a real learning experience. Azania Bank officials who cooperated very well with, by providing any information I needed for my study. My heartfelt gratitude to my mother for giving me financial support and material support which without this study could not have been complete. Department of†¦show more content†¦1.2: DESCRIBING THE DIFFERENCES BETWEEN TRADITIONAL BANKING AND MORDERN BANKING Banking The word Net defines bank as financial institutions that accepts deposits and channels the money into lending activities. The Webster’s Revised Dictionary (1913) defines a bank as original ‘’bench’’, ‘’table’’, ‘’counter’’ of Germany origin an a kin to English ‘’bench’’ an established for the custody, loan, exchange or issue of money and for facilitating the transmission of funds by drafts or bills of exchange 1. FRACTIONAL BANKING This is the system which more than one deposit is backed by the same amount of cash in the banks vault. In traditional banking banks were apparently bankrupt because if any day all the depositors could pull out their deposits the banks would be left penniless. But modern banking applies fractional banking by working hand in hand with the government by establishing monetary policies which regulates money supply and protects banks from the bankruptcy menace. 2. DEPOSIT ATTRACTING The deposit attracting is the main goal for any financial institution nowadays. The deposits historically are the main source of funds for banks. In past banks were used by people to save money or security and convenient means. However as economy developed the trade become more international banks started to attract funds from under pillow to their accounts. In the traditional