CHARTERED BANK Meaning and
Definition
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A chartered bank refers to a type of financial institution that has been granted a charter or license by a regulatory body to operate banking services within a specific jurisdiction. It is a legal entity that is authorized to conduct a wide range of financial activities, including accepting deposits from customers and providing loans and other credit facilities.
Chartered banks are typically subject to strict regulation and supervision by government agencies, such as central banks or monetary authorities, to ensure their compliance with banking laws and regulations. These banks must meet certain criteria and adhere to specific guidelines to obtain and maintain their charter.
One of the key characteristics of a chartered bank is that it can issue its own currency, such as banknotes and electronic money, which are legally recognized and accepted as a medium of exchange within the jurisdiction where it operates. This authority to create and manage the money supply gives chartered banks significant influence over the economy and financial system.
Chartered banks play a crucial role in facilitating economic activities by providing individuals, businesses, and governments with essential financial services. These services can include deposit accounts, loans, mortgages, credit cards, foreign exchange, investment products, and various types of payment services. In addition, chartered banks often engage in wealth management, investment banking, and other specialized financial activities to generate revenue and meet the diverse needs of their clients.
Common Misspellings for CHARTERED BANK
- xhartered bank
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- chaetered bank
- chadtered bank
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Etymology of CHARTERED BANK
The word "chartered bank" has its origin in the term "charter". In medieval Europe, a charter was a legal document granted by a monarch or other authority to establish certain rights and privileges for an organization or institution.
In the context of a bank, a chartered bank is a financial institution that has received a charter from a regulatory authority, typically a government agency, granting it the authority to operate as a bank. The charter outlines the specific rights, privileges, and responsibilities of the bank, including the ability to accept deposits, issue loans, and conduct various banking activities.
The term "chartered bank" emerged in the 19th century, as the concept of granting charters to regulate banking operations became more common. It was used to differentiate banks that were formally authorized and supervised by a regulatory body from other financial institutions that operated without such oversight.
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