Before money was invented people used to exchange goods for goods which was called barter system. There were many problems of barter system such as absence of a common measure of value, lack of double coincidence of wants, lack of space to store goods to exchange them for other goods etc. This prompted human society to discover money.
The functions of money include medium of exchange, measure of value, store of value and used in making future payments. Money is exchanged in the form of paper currency notes and coins.
Bank is an organization which accepts deposits from public and advances loans to people. Bank can increase its deposits by creating credit as lender. Credit means claims to receive payments from the borrowers.
In India Reserve Bank of India is the head of the banking system. The different types of banks which are operating in the country are - commercial banks, cooperative banks and development banks, besides RBI.
Saving is the income which remains after consumption. People save for security in future and to earn interest on their saving. People save their money in post offices and banks.
Lender is the person who has saved money and gives it to borrower as loan at some rate of interest. Borrower is the person who borrows money by paying the interest rate.
Insurance is a product which people buy to reduce the risk of loss or damage to their life, health, automobiles, etc.