Banks deal mainly with money and credit. They are manufacturers of money.

Industrial and
economic evolution would not have occurred in the absence of banks. They play significant role
in the shaping and in the advancing of modern societies. They distribute the funds equitably,
reduce cyclical fluctuations. The industrial development will not be possible without the help of
the banks. They purchase and sell money and credit. Creation of credit is a special function of
banks. They are the architecture of the digital economy. They encourage trade and industry.
 
The functions are the main income sources of money. Every bank must follow these functions.
The basic functions of a bank are (1) Accepting of Deposits (2) Advancing of Loans (3) Secured
Advances
 
2.1 Accepting of Deposits
 
Deposits are the most important element in the banking sector. They collect surplus money from
the public. The deposits will be mobilized by banks. The money collected from the public are
preserved by banks and interest will be paid by the banks. The depositors are benefited and their
amount of money is safe at the banks. In this situation the banks can earn a sum of money on the
amount collected by them. The banks create credit on the basis of deposits. The level of creation
of credit depends upon the amount of deposits. The banks have introduced different types of
deposits to suit the various requirements of the depositors. The types of deposit schemes are
briefly discussed below:
(a) Fixed Deposits
(b) Current account
      ( c) Savings Bank Account
(d) Money Multiplier Account
(e) Other Accounts
 
Fixed Deposits: Under this scheme the banks mobilizes the deposits which are repayable after
the expiry of three months to five years. The banks are free to use the deposits for a certain
period. They grant loans at higher rate of interest on these deposits. They can use the deposits
money for a certain period of time for more remunerative purposes. The small savers will get
benefits from the scheme. The small customers are unable to make investments in the industrial
securities market. They do not want to take risk from the securities market. A large number of
savers prefer this mode of investment. The fixed deposit has become more lucrative as rate of
interest has increased up to 10 percent. The customers can earn more by combining the Fixed
Deposit account with recurring deposit account. The interest on FDR will be credited to the
recurring deposit account. The amount of fixed deposit cannot generally be withdrawn before the
expiry of the period of deposits. However banks can advance money of the security of fixed
deposits if the depositors are not willing to withdrawn the amounts deposited.
                    The fixed deposits are also known as Term Deposit. Fixed deposits have grown in
importance and popularity in India during recent years. These deposits constitute more than half
of the total bank deposits. The rate of interest and other terms and conditions are regulated by the
RBI. The RBI revised the rate of interest on fixed deposits several times. The main object of the
step was to make bank deposits more attractive as compared to other savings instruments.
 
Current Account: Current account is more beneficial to those who withdraw several times from
the account of deposits. No interest is paid on this account.  Cheques are generally used for
withdrawing a certain amount from the deposits. Current accounts are more useful to the
businessmen. They can produce this account as an evidence of revenue for the assessment of
Income Tax. The businessmen are not required to keep with them a large amount of money. He
will make payments by issuing cheques to the parties. The cheques can be transferred to any
person for the settlement of dues. The current account is opened subject to the conditions.
Generally no interest is paid on the amount of deposit balances and no charges are required for
maintaining such account. Current accounts are more useful to the businessmen, firms,
companies and individuals.
 
Savings Bank Account: Savings bank account is useful to middle and low income groups. They
can save certain amount during a certain period. It is a flexible account. In this account, the
depositor can withdraw money about thrice a week. The account holder can deposit money at
any time. The interest is calculated on the minimum balance maintained each month. A person
wishing to open saving bank account will have to fill up a form. He has to furnish his specimen
signature. A passbook will be issued to the account holder. If the depositor wants to withdraw
money he must fill up a withdraw money he must fill up a withdrawal form and must present his
book for payment. Now some banks extended the cheques facility to the savings bank customers.
 
Money Multiplier Account: The persons who are interested to deposit money for more money
at short period of time. Under this scheme the amount of interest is also redeposited. The rate of
interest is highest on this deposit. The depositor can withdraw the accumulated money after
stipulated period. The depositor can withdraw the whole amount either in lump-sum or in
installments. If the depositor opted for installments higher amount is returned to the person. This
is most suitable for old age provision.
 
Other Accounts: There are so many saving deposit accounts like Recurring deposit account,
private savings account and special saving account. Recurring deposit accounts are more popular
in India. A fixed amount is deposited at a regular interval and it attracts accumulated at
compound rate of interest. Under this scheme the interest and the principal amount is returned to
the depositor after the fixed period. The rate of interest is higher than of saving account and
lower than of fixed deposit account. It is a great source of stimulating short deposits. These
schemes are designed to meet the requirements of education and marriage.                       
  
2.2 Principles of Sound Lending
 
The business of lending carries certain inherent risk, and banks can afford to take only calculated
risks as they deal in other people’s money. Another important facet of bank operations is the
need to have ready cash as a bank is under an obligation to return the customer’s money
whenever it is demanded. Hence, the nature of bank functions is such that it requires a very
prudent and diligent handling of bank funds. It is advisable that the following general principles
of sound lending should be followed by a banker at the time of granting advances.
 
1. Liquidity:  Liquidity is an important principle of bank lending. Banks lend for short
periods only because they lend public money which can be withdrawn at any time by
depositors. They, therefore, advance loans on the security of such assets which are easily
marketable and convertible into cash at a short notice. A bank chooses such securities in its
investment portfolio which possess sufficient liquidity. It is essential because if the bank
needs cash to meet the urgent requirements of its customers, it should be in a position to sell
some of the securities at a very short notice without disturbing their price much. There are
certain securities such as central, state and local government bonds which are easily saleable
without affecting their market prices.
2. Safety: The safety of funds lent is another principle of lending. Safety means that the
borrower should be able to repay the loan and interest in time at regular intervals without
default. The repayment of the loan depends upon the nature of security, the character of the
borrower, his capacity to repay and his financial standing. Like other investments, bank
investments involve risk. But the degree of risk varies with the type of security. Securities of
the central government are safer than those of the state governments and local bodies. From
the point of view, the nature of security is the most important consideration while giving a
loan. Even then, it has to take into consideration the creditworthiness of the borrower which
is governed by his character, capacity to repay, and his financial standing. Above all, the
safety of bank funds depends upon the technical feasibility and economic viability of the
project for which the loan is advanced.
3. Diversity: In choosing its investments portfolio, a commercial bank should follow the
principle of diversity. It should not invest its surplus funds in a particular type of security but
in different types of securities. It should choose the shares and debentures of different types
of industries situated in different regions of the country. The same principle should be
followed in the case of state governments and local bodies. Diversification aims at
minimizing risks of the investment portfolio of a bank. The principle of diversity also applies
to the advancing of loans to varied types of firms, industries, businesses and trades. A bank
should follow the maxim: “Do not keep all eggs in one basket.” It should spread it risks by
giving loans to various trades and industries in different parts of the country.
4. Stability: Another important principle of a bank’s investment policy should be to invest in
those stocks and securities which possess a high degree of stability in their prices. The bank
cannot afford any loss on the value of its securities. It should, therefore, invest its funds in the
shares of reputed companies where the possibility of decline in their prices is remote.
Government bonds and debentures of companies carry fixed rates of interest. But the bank is
forced to liquidate a portion of them to meet its requirements of cash in case of financial
crisis. Thus bank investments in debentures and bonds are more stable than in the shares of
companies.
5. Profitability: This is the cardinal principle for making investment by a bank. It must earn
sufficient profits. It should, therefore, invest in such securities which assure a fair and stable
return on the funds invested. The earning capacity of securities and share depends upon the
interest rate and the dividend rate and the tax benefits they carry. It is largely the government
securities of the centre, state and local bodies that largely carry the exemption of their interest
from taxes. The bank should invest more in such securities rather than in the shares of new
companies which also carry tax exemption. This is because shares of new companies are not
safe investments.
 6. Principle of Purpose: At the time of granting an advance the banker must enquire about
the purpose of the loan. If it is for speculative or unproductive purposes, it may prove to be a
burden on cash generation and repayment capacity of the borrower. On the other hand, it can
be reasonably anticipated that loans meant for productive purposes help generate incremental
income that results in prompt repayment of the loan.
7. Principle of Social Responsibility: At the time of evaluation of a loan project, bankers
should not put an overdue emphasis on the size of the borrower, and the security that he is
offering. The technical competency of the borrower and the economic viability of his project
should also be considered. The priority sector guidelines have also to be followed by the
bankers, if they want to contribute in the process of economic development by helping more
and more entrepreneurs to run successful ventures. The principle of social responsibility does
not, however, mean that adequate attention should not be paid to other principles.
 
2.3 Methods of Granting Advances
 
Bank deals with money of other persons. Bank does not lend its own money. It is the other’s
money in which it deals. The advances of bank may be granted in the form of loans,
overdraft, cash credit, credit discounting bills of exchange. The bank advances loan more
than the amount of deposits, because all the loans are not withdrawn immediately. Therefore
the loan creates deposits, while advancing loans; the bank gives priority to safety and next
profitability. In advancing loans, the principles of investment safety, liquidity and
profitability, diversification and social objectives are considered. The main methods of
granting advances in India may be classified as follows:
(a)          Loans
(b)     Cash Credit
(c)      Overdraft
(d)     Discounting of Bills
 
Loans: Loans are important element of the profitability of the banks. They are made by debiting
the customers loan account and by crediting his current account. The customer is allowed to
withdraw the loan amount by installments. The regular customers are permitted loans by
crediting to their accounts; proper care is taken while granting the loans. All of the loans require
a proper security or mortgage. Sometimes only the personal security is required for advancing
the loan. The interest is charged on the loan amount. Loans involve low operating cost than other
kind of loans. Loans are given against the securing of movable and immovable assets. A brief
description follows:
       I.            Short- term Loans: Short-term loans are loans which are granted for a period not exceeding
one year. These are advanced to meet the working capital requirements, again security of
movable assets like goods, commodities shares, debentures, etc. They are usually taken to meet
the working capital requirements of business.
    II.            Term-Loans: Medium and long-term loans are usually called term loans. These loans are
extended for periods ranging from one year to about eight or ten years on the security of existing
industrial assets or the assets purchased with the loan. Term loans are used for purchase of
capital assets for establishment of new industrial units, for expansion, modernization or
diversification. They involve an element of risk as they are intended to be repaid out of the future
profits over a period of years. Consequently, apart from the financial appraisal of such loans, the
 technical feasibility and managerial competency of the borrower should also be studied. Banks
can charge fixed rates of interest for the entire period or different prime lending  rates for
different maturities, provided transparency and uniformity of treatment is maintained.
 III.            Bridge Loans: Bridge loans are essentially short-term loans that are granted pending
disbursement of sanctioned term loans. These help borrowers to meet their urgent and critical
needs during the period when formalities for availing of the term loans sanctioned are being
fulfilled. They are repaid out of the amount of such loans or from the funds raised in the capital
market if these loans are granted by financial institutions.
 IV.            Composite Loans: If a loan is taken for buying capital assets as well as for meeting working
capital requirements, it is called a composite loan. Usually such are availed by small
entrepreneurs, artisans and farmers.
    V.            Consumption Loans: Traditionally, banks used to focus on loans for productive purposes,
but during the recent past banks have increasingly started giving loans for consumption purposes
like education, medical needs and automobiles.         
 
Cash Credit: Cash credit is another method of advances made by banks. In this method the
banker grants his customer to borrow money upto a certain sanctioned limit. The bank requires
security of certain bonds, promissory notes, shares, other commodities. Sometimes commodities
are kept in the possession of the bank in its godowns. The borrower is charged interest on the
amount of advance. Generally the cash credit system provides adequate amount for meeting
essential expenditures of the business. The large amount of credit is granted through credit
system because the whole amount of credit is not required to be withdrawn at once. It is the best
method to suit the requirements of the business community. Generally raw materials are
purchased on the basis of this credit. This type of loan is mostly short-term credit. The borrowers
can withdraw the sanctioned loan according to their convenient. The interest will be charged on
the dates of withdrawal of the amount.
 
Overdraft: Bank overdraft is allowed to current account holders. The current account holders
may be allowed to overdraw. The overdraft facility is more advantageous to the customers
because interest is charged only on the amount withdrawn. There is no need to provide collateral
security for the facility of overdraft. It can be used at any time of requirement. It is used for long-
term purposes. It is the most useful form of loans to commercial and industrial units to avail from
time to time. The overdraft will be granted by the bank with the mutual agreement with the
customer and bank. This form of advances has undoubtedly more benefits.
 
Discounting of Bills: The banks involves in discounting of bills. They discount only clear and
reputed bills. Discounting of bills is one of the methods of advances made by the banks. The
banks involve is discounting of bills. The working capital of the corporate sector is mainly
provided by banks through cash credit, overdrafts, and discounting of the commercial bills. The
bills are used for financing a deal in goods that takes same time to complete. The bill of
exchange reveals that the liability to make the payment on a fixed date when the goods are
bought on mercantile basis. The bills of exchange will be treated as negotiable instrument. The
bills are drawn by the seller on the buyer for the value of the goods delivered by him. These bills
are called as trade bills. If the trade bills are accepted by the commercial banks are known as
commercial bills. If the seller provide some time for the payment of the bill payable at a future
date is known as usance bill. If the seller party is in need of finance, he may approach the bank
 for discount of the bill. The commercial banks generally finance the business community through
bill discounting method. The banks can rediscount the bills in the discount market. A bill is
always drawn by the creditor on the debtor. A bill may be payable at sight or after the expiry of a
certain specified time. There will be 3 days of grace period for a bill. The discount amount on the
trade bill becomes income to the commercial banks. It is an income generating activity for the
banks. The RBI introduced a bill market scheme in 1952. According to the scheme, the banks are
required to select the borrowers after careful examination of their credit worthiness and
reputation.
 
2.4 Secured Advances
 
In accordance with the principles of safety and security of sound lending, commercial banks
prefer to make advances against securities. A secured advance is one which is made on the
security of either assets or against personal security or other guarantees. An advance which is not
secured is called an unsecured advance.
                  The basic objective of obtaining securities is to recover the unpaid amount of loan if
any, through the sale of these securities. Hence, the securities should be clearly identifiable be
easily marketable, have stability and their title should be clear and easily transferable.
 
 
 
Classification of Securities: Based on their nature, securities can be divided into various
categories:
1.      Personal Securities: These are also called intangible securities. In case of these, the banker has
a personal right of action against the borrower, e.g. promissory notes, bills or exchange, a
security bond, personal liability of guarantor etc.
2.      Tangible Securities: These are forms of impersonal security, such as, land, buildings and
machinery. In the event of recovery of loans, banks have to get such securities enforced or sold
through the intervention of court.
3.      Primary Securities: These are those securities or assets which are created with the help of
finance made available by the bank, like machinery or equipment purchased with the help of
bank finance.
4.      Collateral Security: This security is not what is financed out of the bank advance. It is
additional security given by the borrower where the primary security is not enough to recover the
loan amount at the time of realization, e.g. the land of the factory is given as security along with
the machinery purchased out of the bank loan.
 
2.5 Modes of Creating Charges
 
In case of secured loan, a charge is created on the asset in favour of the bank. In other words, the
banker obtains a legal right to get payment of the loan amount out of the security charged.
Charges can be of the following types such as lien, pledge, assignment and mortgage. Charges
can also be categorized according to their nature such as fixed charge or floating charge. A fixed
charge is created on assets whose identity does not change, e.g., land and building. In the case of
floating charge, the identity of the asset keeps fluctuating, e.g., stocks.
       The legal provisions regarding modes of creating charge over tangible assets and the rights
and obligations of various parties are explained hereinafter:
 
Lien: Lien means the right of the creditor to retain the goods and securities owned by the debtor
until the debt due from him is repaid. The creditor gets only the right to retain the goods and not
the right to sell. Lien can be either particular or general. The right of particular lien can be
exercised by a person who has spent his time, money or labour on the goods, e.g. a car mechanic,
a tailor, etc. It can be exercised against only those goods for which charges have to be paid. A
banker, however, enjoys the right of general lien.
Features:
The right of general lien right of a banker is a blanket right, and is applicable in respect of all
amounts which are due from the debtor such as security handed over to the banker for a
machinery loan after its repayment can also be used by the banker in respect of any other
advances outstanding in his name, e.g., against an overdraft taken by the borrower.
Even though this right is conferred upon the banker by the Indian Contract Act, yet it is advisable
to take a letter from the customer mentioning that the goods have been entrusted to the banker as
security, and he may exercise his right of lien against it.
The bankers’ right of lien is tantamount to an implied pledge. Unlike as in the case of particular
lien the creditor can only retain the goods till the amount due is paid, the banker has the right to
sell the goods in case of default of the customer.
Sometimes even a negative lien can be entered into. Under this arrangement, the borrower has to
1. give a declaration that the assets given as security are free from any charge or encumbrance, 2.
That no charge will be created on them nor will the borrower dispose of those assets without the
consent of the banker. The banker’s interests are only partially safe by securitizing a negative
lien as he cannot realize his dues from these assets.
 
Pledge: Pledge is the bailment of goods as security for payment of a debt or performance of a
promise. When a borrower secures a loan through a pledge, he is called a pawner or pledger, and
the bank is called the pawnee or pledge.
Features
·         The goods can be pledged by the owner, a joint owner with consent of other joint owners, a
mercantile agent or in some cases by an unpaid seller.
·         The banker can retain the goods for the payment of the debt, for any interest that has accrued
on it as well as any expenses incurred by him for keeping the goods safe and secure.
·         Goods can be retained for any subsequent advances also, but not for any existing debt which is
not covered by the pledge.
·         In case of non-payment, the banker has the right to sell the goods and recover the amount of
loan along with the interest and expenses, if any.
·         In case of default by the pledger, the banker has the right either to·
         File a civil suit against the pledger and retain the goods as additional security or
·         Sell the goods. In case of sale, banker must give due notice of sale to the borrower  before
making a sale.
·         This right is not limited by the law of limitation.
·         Banker’s right of pledge prevails over any other dues including government dues except
worker’s wages.
 
Hypothecation: Hypothecation is an extended idea of pledge, whereby the creditor permits the
debtor to retain possession of goods, either on behalf of or in trust for him. Hypothecation is a
charge made on movable property in favour of a secured creditor without delivery or possession.
Charge is created only on movable goods like stocks, machinery and vehicles. The borrower
binds himself to give the possession of the goods to the banker, whenever the latter desires. It is a
convenient device in the circumstances in which the transfer of possession is either inconvenient
or impracticable such as buses and taxies, which are given as security by taxi operators, but are
used by them. The agreement is entered into through a deed of hypothecation.
                The bank cannot take possession without the consent of the borrower, but after taking
possession, the banker is free to exercise the right of pledge, and sell the assets without
intervention of the court.
 
Assignment: Assignment of a contract means transfer of contractual rights and liabilities to a
third party. The transferor or borrower is called the assignor, and the transferee or banker is
called the assignee. The borrower can assign any of his rights, properties or debts to the banker
as security for a loan. These might be existing or future. Generally the ‘actionable claims’ are
assigned by the borrower. An actionable claim is a claim to any debt, other than a debt secured
by mortgage of immovable property, or by hypothecation or pledge of movable property, or to
any interest in movable property not in the possession, either actual or constructive, of the
claimant which the civil court recognizes as affording ground of relief, whether such debt or
beneficial interest be existent, accruing, conditional and contingent. Usually the borrower may
assign books debts, money due from government or semi-government or semi-government
organizations or life insurance policies.
         Although notice of assignment of the debtor is not required under law (section 130 of
Transfer of Property Act, 1881), nevertheless it is in the interest of the assignee to give notice to
the debtor because in the absence of the notice, the assignee is bound by any payments which the
debtor might make to the assignor in ignorance of the assignment. For example, if the borrower
assigns his life insurance policy in favour of his banker as security for a loan, the bank should
give a notice to the Life Insurance Corporation (LIC), otherwise if any payment is made by the
LIC to the borrower, the banker will not be able to claim it.
         Assignment may be legal or equitable. A legal assignment is effected through an
instrument in writing signed by the assignor. The assignor too informs the debtor in writing
about the assignment, the assignee’s name and address. The assignee also serves a notice on the
debtor of the assignor, and seeks confirmation of assigned balance. If the above conditions are
not fulfilled, i.e. assignment is not done in writing, or notice of assignment is not given to debtor,
then such assignment is called equitable assignment.
 
Mortgage: When a customer secures an advance on the security of specific immovable property
the charge created thereon is called a mortgage. Section 58 of the Transfer of Property Act, 1882,
defines a mortgage as, The transfer of an interest in a specific immovable property for the
purpose of securing the payment of money advanced or to be advanced by way of loan, on
existing or future debt, or the performance of an engagement which may give rise to pecuniary
liability. The instrument through which it is affected is called a mortgage deed, the customer
(transferor) is called the mortgagor and the bank (transferee) is called the mortgagee. The
payment so secured which includes both the principal money and the interest thereon is called
the mortgage money.
       Section 58 of Transfer of Property Act, recognizes six types of mortgagers which are
discussed hereinafter.
Simple Mortgage: In case of simple mortgage, the mortgagor does not give possession of
property, but binds himself personally to pay the mortgage money. He agrees expressly or
impliedly that in case he fails to make the payment according to the contract, then the mortgagee
shall have right to cause the mortgage property to be sold and proceeds of sale to be applied, as
far as may be necessary, in payment of the mortgage money. The mortgagee himself cannot sell
the property, but has to seek intervention of the court.
Mortgage by Conditional Sale: Under this form of mortgage the mortgager ostensibly (on the
face of it) sells the mortgaged property with any one of the following conditions:
       I.            On default of payment of mortgage money, the sale shall become absolute.
    II.            On payment being made on a certain date, the sale shall become void.
 III.            When the payment is made, the buyer shall transfer the property to the seller.
 
Usufructuary mortgage: Unlike the simple mortgage which is non-possessory, in case of
usufructuary mortgage, the mortgagor delivers possession of the mortgaged property. The
mortgagee is also entitled to receive rents and profits accruing from the property and appropriate
the same in lieu of interest or in payment of mortgaged money or both. When the debt is so
discharged or repaid, the mortgagor is entitled to recover possession of his property. There is no
personal liability on the mortgagor.
 
English Mortgage: In case of English mortgage, there is transfer of ownership on the condition
that the mortgagee will re-transfer the same on the payment of mortgage money. Further, the
mortgagor personally undertakes to repay the mortgaged money. In case of default, the
mortgagee has the right to sell the property without seeking permission of the court in the special
circumstances mentioned in section 69 of the Transfer of Property Act.
 
Mortgage by deposit of title deeds (equitable mortgage): This mortgage is affected by deposits of
title deeds of the property by the debtor in favour of the creditor to create a security thereon. This
type of mortgage is called equitable mortgage in English law. In India, it is restricted to the cities
of Delhi, Mumbai, Kolkata and Chennai or any other town which the concerned state
government may notify in the official gazette in this behalf. No registration is necessary and
delivery can be either actual or constructive. There is personal liability of the mortgagor to pay,
and the mortgagee can sell the property with the sanction of the court if the mortgaged money is
not repaid.
Anomalous Mortgage: A mortgage which is not simple mortgage, mortgage by conditional sale,
usufructuary mortgage, English mortgage and mortgage by deposit of title deeds (equitable
mortgage) is called an anomalous mortgage. If the terms of the mortgage do not strictly adhere to
any of the above five types, e.g. in case of simple mortgage if the mortgagee is allowed to use the
mortgage property, then it will not be called simple or usufructuary but an anomalous mortgage.
Under this the rights and liabilities of the parties are determined by the terms agreed upon in the
mortgage deed, and in the absence of such a deed by the local usage.
 
2.6 Legal Mortgage vs. Equitable Mortgage
 
From the point of view of transfer of title to the mortgaged property, a mortgage may either be a
legal mortgage or an equitable mortgage.
 
Legal Mortgage: legal mortgage can be enforced only if the mortgage money is Rs. 100 or
more. It is affected by transfer of legal title to the mortgage property by the mortgagor in favour
of the mortgagee. All this involves expenses in the form of stamp duty and registration charges.
At the time of repayment of mortgaged money, the property is retransferred to the mortgagor.
 
Equitable Mortgage: In case of equitable mortgage, only documents of title are transferred in
favour of the mortgagee and not the legal title. No registration is necessary and no stamp duty of
deposit, the mortgagor undertakes to execute a legal mortgage in case of default in payment
within the stipulated time. The reputation of the mortgagor is not affected, since in absence of
registration no one comes to know about the mortgage. However, this can prove risky also if
through negligence or fraud, another party is induced to advance money on the security of the
mortgaged property as the subsequent mortgagee will have priority over the first.       
 
2.7 Conclusion
 
In conclusion, it is pertinent to mention that none of the principles should be considered in
isolation. While evaluating a loan proposal, judicious balance of all the cardinal principles of
sound lending are called for. This has become more imperative after 1991. Before liberalization,
banking business did not face much competition. As it was concentrated in a few hands, the
policy environment was characterized by close regulation and control, and profitability was not
the dominant criterion on which the banks were supposed to function. But now the commercial
principles of viability, efficiency, prudence and profitability are receiving as much attention as
social banking.