With an abundance of natural and historic landmarks, with communities in the valley and among the foothills, Rockbridge County residents enjoy the best the Commonwealth has to offer.
Known as the home of two renowned educational institutions, Washington and Lee Unversity and the Virginia Military Institute, Lexington is an ideal enviroment for families to raise children, small businesses to thrive, farmers to cultivate gardens and grain, and horses, hunters and fishermen to be found in abundance.
The Bank of Rockbridge is pleased to come to the region and bring community banking to its citizens. We are here for you.
T. David Grist, President & CEO
What Are The Main Functions Of Banking Today?
A modern economy must be supported by an optimally-functioning financial system. Banks are needed to perform important tasks for the society and must therefore remain secure. They are responsible for lending money to businesses and consumers and making sure that all payments for goods are processed securely, smoothly, and at low costs. When banks fail in their duties to perform such tasks, it can have far-reaching effects on the whole economy. Here are the key functions of banking today:
- Banks are responsible for keeping people’s savings since we no longer keep them at home to avoid them from being lost or stolen. Besides, by keeping them in banks, we can earn interest on our deposits. The interest may be minimal; some deposits can be withdrawn after a fixed time period or may be subject to fractions of the amount deposited in which case they are referred to as time deposits, like fixed deposit. Current deposits are made by entrepreneurs where the account holder receives an overdraft facility. Such deposits are like short-term loans for catering to emergency needs. Banks can charge high interest rates on these. Recurring deposits are sums of money deposited in a bank at regular intervals but you can withdraw money only after a specified time period has expired.
- An important banking function is to lend money to individuals, businesses, and traders via different methods. At times, an account can be opened for the borrower through which he draws checks. Banks can also offer loans to industrial establishments and individuals against debentures, shares, gold, etc. Customers will have to repay the loan borrowed with interest; this is how banks make profits. Banks lends money to traders who invest in Forex, stocks, Bitcoin etc., 60 percent of traders indicated they would definitely use their bank if it offered them the possibility to invest in cryptocurrencies. You can identify the besten trading apps used by these traders to earn high profits.
- Banks help to create money; earlier, they could print or issue currency notes on demand and these were used as medium of exchange. But today only the central bank can do this. Banks can even extend loans in excess of funds deposited with them and checks may be drawn against these loans.
- Transfer of money is an essential banking function. For those having current accounts, the bank pays companies to who they owe money; this is by transferring funds from one to another account according to instructions given by the customer like a check, credit card, standing order, travelers check, etc.
- Banks are responsible for creating credit. Every loan will create a deposit; an increase in credit in the bank is equivalent to bank deposits being multiplied. The economic development of any nation is dependent on availability and accessibility of banking services in that country. So, modern banks do perform tasks that help in economic growth and development. For instance, banks in India help the government to implement Five Year Plans; they extend loans to priority sectors and install branches in under-banked areas.
- Apart from these regular functions, commercial banks today offer many other facilities like helping you store your valuables in safety vaults/lockers, offering agency services like electricity bills, payments for insurance premiums, transferring funds from place to place inside and outside the country, dealing in foreign exchange, issuing gift checks and travelers’ checks, underwriting shares/debentures, social welfare programs, standing guarantee for customers, etc. Banks can collect money of checks through clearing sections and manage their clients’ portfolios. So, it can take up the task of buying and selling shares/debentures of its clients.