A bank is an institution which borrows and loans money and deals in negotiable securities and keeps money on deposit. A banker is one who conducts a banking business. Banks, now are usually incorporated.
A bank is "An institution generally incorporated, authorized to receive deposits of money, to lend money and to issue promissory notes - usually known by the name of banknotes - or to perform some one or more of these functions."151
Banks are said to be of three sorts - those which receive deposits, those which discount commercial paper, and those which issue banknotes for circulation. But these activities are usually performed by the same bank.
A bank that is not incorporated is called a "private" bank. A bank organized under a state law is called a state bank, and under the Federal law, a national bank.
151. Bouviers Law Dict., title, "Banks."
A bank which receives money for deposit, not subject to check, and upon which it pays interest, is called a "savings bank."
Banks are peculiarly susceptible to governmental regulation. Operating as depositaries of money and issuing banknotes their responsibility determines the prosperity of the community. They are, in effect, although maintained by private funds, a part of the monetary system of the country. The soundness of the banking system is vital to the welfare of the people. Hence, the propriety of intimate regulation by the state.
In this chapter, only a very general discussion may be attempted; and the purpose is to give a general understanding of the scope of the law of banks and banking.