By defining the Bank as an institution, accumulating free funds and place them on a return basis, can be allocated in the activities of the organization passive and active operations.It is necessary to understand these concepts in more detail.
passive operations of the bank
With this type of banks form the resources for the job.Their essence is to attract various types of deposits, issue of securities received from other bank loans, as well as in other operations, thus increasing the bank resources.Passive operations of the bank has historically played a decisive role with respect to primary and active, since the second type of operation requires sufficient resources.
Russian commercial banks in the practice referred to as passive operations following:
- acceptance of deposits;
- opening customer accounts and their management, including accounts of correspondent banks;
- production of its own financial instruments, including securities;
- giving and receiving of interbank loans program.
Equity - is a special form of resources.Due to this capital made compensatory payments to creditors and depositors in the event that the bank has suffered losses or went bankrupt, and these tools allow you to keep all types of transactions and volumes in accordance with the objectives of the organization.Own funds include in their composition share, backup, and other special-purpose funds, in addition, this includes income that is not distributed throughout the year.
passive operations of banks are to accumulate activities and raise funds for their subsequent placement.Operations of commercial banks are following functions:
- maintenance of the necessary resources;
- the formation of the sources of funds for use in the economy;
- augmenting income individuals and legal entities, issued in the form of bank interest on deposits;
- increase the bank's capital;
- creation of reserve funds of insurance operations.
passive operations of the bank - operations aimed at mobilizing funds.As a result, they receive funds, which serve as the basis of banking.Active banking operations focused on the placement of funds.As a result, the bank receives a debit interest is higher than the credit paid on passive operations.The margin, ie the difference between debit and credit interest is an important traditional source of income banks.
under the deposit operations meant perpetual and term investments of customers.It also decided to attribute a variety of savings operations.The mission of savings deposits is the accumulation of customer funds, which is issued a certificate.
active operations of banks
This type of operation is made up of credit, investment, cash, commission-intermediary.Usually, the active operations refers to granting of loans of all kinds.The most common short-term loans to economic agents, which are usually focused on the purchase of inventory.The loan is issued under the provision of real or not, but to obtain it require the provision of financial instruments that characterize the corresponding position of the borrower, which will allow the bank to assess the possibility that the loan will be repaid in a timely manner.
Now, you know that means the concept of "passive operations of the bank", and what is the essence of active operations.