Commercial Bank - a credit institution with universal functions, which is created for attracting followed by placement of funds.In addition, banks in the activity carried out other operations.
After obtaining a license for certain activities from the parent bank, a commercial bank may start to work as a credit institution, as well as to perform certain types of operations, the right to provide that a license.Banks are forbidden to carry out production, trade and insurance activities.
Banks are characterized by a dual character.In addition to commercial establishments, banks are important social institutions.If we start from the commercial component, the banks are primarily interested in getting the maximum profit from their activities, as well as a social institution, they are an important component of the financial infrastructure and the need to ensure the conditions for the economic development of the state, as well as to improve the welfare of the population.From the banks' activities largely depends on the state of the economy.Without a strong banking sector, acting on a commercial basis, there is no way to create an effective market mechanism.
operations of commercial banks are divided into passive and active.They are interdependent.
the basis that the operations of banks are divided into passive and active on the principle of formation and placement of bank resources.Liabilities are the free resources of the bank that are available and are used for active operations.Issuing loans and buying securities, that is, carrying out active operations banks carry out continuous monitoring of the volume of liabilities, analyzing the timing of regular payments on deposit liabilities.
As part of the banks' resources, equity, usually takes a small proportion.Its main part is formed by using borrowed funds.
as attracted liabilities of commercial banks use:
- deposits in a variety of conditions;
- funds that are attracted by the implementation of emission and distribution of issued securities, which include bonds, bills, certificate;
- funds received under inter-bank agreements, including credit funds from the central and foreign banks.
Deposit operations of commercial banks is one of the traditional banking services, which make up the main part of the bank's liabilities and serve as the main source of active banking operations.
active operations of banks - action to deploy passive income of the bank for the purchase.Active operations are carried out on a commercial basis under a pre-set interest rate and / or commission.In the exercise of active operations of commercial banks play an important role analysis of the financial condition of the borrower in order to identify the capacity for repayment of borrowings and interest on time.From the quality of the active operations depends on the profitability and financial soundness of the bank.
Intermediary operations have long been closely intertwined with the credit operations and formed a complex form of banking services, which include factoring and leasing.
The basis of factoring transactions is reselling the right to collect the debt related to the implementation of industrial or commercial activities.
Leasing operations of commercial banks is a specific form of long-term lease agreement for vehicles, equipment, technique, in which the ownership of the leased subject is the lessor.
As you can see, the operation of commercial banks are quite diverse and are intended to provide not only the requirements of stakeholders, and contribute to the development of a market economy as a whole.
