Definition

There are several ways by which to define the term ‘bank’:

1. The function it fulfills (operational)
2. Its business model (value exchange)
3. The legal definition within the jurisdiction it operates in (legal)
4. Regulatory licensing classification (political)
5. Popular definition (common usage)

Here are some definitions of ‘bank’ from different sources:

AllWords.com – “An institution where one can place and borrow money and take care of financial affairs.”

Barron’s Dictionary of Banking – “Organization, usually a corporation, that accepts deposits, makes loans, pays checks, and performs related services for the public.”

Britannica Concise Dictionary – “Institution that deals in money and its substitutes and provides other financial services. Banks accept deposits and make loans and derive a profit from the difference in the interest paid to lenders (depositors) and charged to borrowers, respectively.”

BusinessDictionary.com – “Establishment authorized by a government to accept deposits, pay interest, clear checks, make loans, act as an intermediary in financial transactions, and provide other financial services to its customers.”

Definitions.net – “depository financial institution, bank, banking concern, banking company
a financial institution that accepts deposits and channels the money into lending activities.”

InvestorWords.com – “An organization, usually a corporation, chartered by a state or federal government, which does most or all of the following: receives demand deposits and time deposits, honors instruments drawn on them, and pays interest on them; discounts notes, makes loans, and invests in securities; collects checks, drafts, and notes; certifies depositor’s checks; and issues drafts and cashier’s checks.”

InvestorDictionary.com – “A financial institution that accepts deposits and makes loans. Types of banks include commercial banks, savings and loan associations, mutual savings banks, and credit unions.”

Justice Holmes in an Irish case (Re Shields Estate) wrote in 1901 – “The bank undertakes to receive money and to collect bills for its customer’s account. The proceeds so received are not to be held in trust for the customer, but the bank borrows the proceeds and undertakes to repay them.”

Merriam-Webster.com – “an establishment for the custody, loan, exchange, or issue of money, for the extension of credit, and for facilitating the transmission of funds.”

OxfordDictionaries.com – “…a financial establishment that uses money deposited by customers for investment, pays it out when required, makes loans at interest, and exchanges currency.”

TheFreeDictionary.com – “A business establishment in which money is kept for saving or commercial purposes or is invested, supplied for loans, or exchanged.”

United States Supreme Court (Austen) in 1899 – “A bank is an institution, usually incorporated with power to issue its promissory notes intended to circulate as money (known as bank notes); or to receive the money of others on general deposit, to form a joint fund that shall be used by the institution, for its own benefit, for one or more of the purposes of making temporary loans and discounts; of dealing in notes, foreign and domestic bills of exchange, coin, bullion, credits, and the remission of money; or with both these powers, and with the privileges, in addition to these basic powers, of receiving special deposits and making collections for the holders of negotiable paper, if the institution sees fit to engage in such business.”

Vocabulary.com – “a financial institution that accepts deposits and channels the money into lending activities.”

Wikipedia.com – “A bank is a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly or through capital markets. A bank connects customers with capital deficits to customers with capital surpluses.”

Wordsmyth.net – “a business concerned with the safeguarding, exchanging, and lending of money.”

YourDictionary.com – “an establishment for receiving, keeping, lending, or, sometimes, issuing money, and making easier the exchange of funds by checks, notes, etc.”

Leave a Reply