Both banks and insurance companies are financial intermediaries. However, their functions are different. An insurance company ensures its customers against certain risks, such as the risk of having a car accident or the risk that a house catches on fire. In return for this insurance, their customers pay them regular insurance premiums. Banks accept short-term deposits and make long-term loans. This means that there is a mismatch between their liabilities and their assets. In case a large number of their depositors want their money back, for example in a bank run scenario, they might have to come up with the money in a hurry. For an insurance company, however, its liabilities are based on certain insured events happening. Their customers can get a pay-out if the event they are insured against, such as their house burning down, does happen. They don’t have a claim on the insurance company otherwise. The purpose of this study Material is to present an introduction to the subjects of Principles & Practices of Banking and Insurance. The book contains the syllabus from basics of the subjects going into the intricacies of the subjects. All the concepts have been explained with relevant examples and diagrams to make it interesting for the readers. An attempt is made here by the author the students by way of providing Study Material as per the curriculum with non-commercial considerations. However, it is implicit that these are examoriented Study Material and students are advised to attend regular class room classes in the Institute and utilize reference books available in the library for In-depth knowledge. We owe to many websites and their free contents; we would like to specially acknowledge contents of website www.wikipedia.com and various authors whose writings formed the basis for this book. We acknowledge our thanks to them. At the end we would like to say that there is always a room for improvement in whatever we do. We would appreciate any suggestions regarding this study material from the readers so that the contents can be made more interesting and meaningful. Readers can email their queries and doubts to our authors on [email protected]. We shall be glad to help you immediately.