Share On

           Gone are the days when bank accounts had relevance only for the people making huge savings or borrowings. The present world is characterized by evolving financial institutions who have come to shape our lives in more ways than once. The banking system has come to be an integral part of today’s society. Either a person has a bank account or not, he/she cannot escape the presence of the banking system.

            Banking system in simple words refers to a chain of financial institutions that provide financial services like deposits, loan, money transfer, etc. to individuals and institutions with interest as the determining factor of the transaction. Banking system plays the role of an intermediary between the ones saving and the ones who borrow money for investments.

          The functions of the banking system can be classified into primary functions and secondary functions.

  • Primary functions: The primary or banking functions include two components namely depositing and disbursement of loans. The depositing function of the banking system has come to be highly developed providing a range of deposit option. Some of the popular deposits are saving deposits, fixed deposits, current deposits and recurring deposits. The disbursement of loans from the capital of savings constitute the determinant for the bank’s earnings, as the loans disbursed are charged with an interest rate levied to the borrowed amount. Some of the key loan advancements include loans, cash credits, overdraft and discounting of the bill of exchange.

  • Secondary functions: Accompanying the primary functions are a pair of secondary functions which the bank performs, namely agency functions and general utility functions. The agency functions refer to services like funds transfer, cheque collections, portfolio management, etc. performing the role of an agent to the customer. The general utility functions refer to the special facilities or services which banking institutions provide, namely locker facilities, project reports, foreign exchange, etc. Not all utilities are provided by every bank, their disposal depends on the resources and nature of the banking institution. 

Types of Banking System:

  • Private Banking: it refers to a complete asset management of the client. It serves all the financial dealings of the client namely investment, tax planning, securities, etc. with a high amount of equity.

  • Home Banking: it refers to all the services, technology and tools which the banking institutions are continuously developing. It provides banking services to the people at the press of a button, removing the hassles of making errands to the bank for minor services.

  • Wholesale Banking: it refers to the provision of banking services big corporations or institutions thus involving personalized and major scale operations.

  • Mixed Banking: banking institutions which perform both the functions of commercial i.e. retail as well as the wholesale functions or corporate banking are called mixed banking systems.

  • Fractional Reserve banking: it is this banking system which led to the distinguished phenomenon of the money multiplier. The banks are not allowed to hold the complete deposits in reserve; they only hold a fraction of the deposit in reserves and use the rest in lendings and investments generating revenue for the banks.

 

ATM remote management solutions

White Paper By: TEKchand

To be best in class, an effective ATM remote management system has to clear various significant hurdles. While there are many ATM remote management solutions, very less offer the completeness, robust applications, ease of use, ATM-centric expertise and affordability of CO-OP ATM Visual Control. ATMs have always remained a significant piece of a credit union’s functionality, and play an...

MiFID II / MiFIR Transaction Reporting: A Practical Guide

White Paper By: Duco

One of the main criticisms of the original MiFID was that national regulators did not enforce the directive with the same zeal across Europe. The list of financial instruments covered has been extended to almost all instruments traded in European markets – with particular emphasis on the OTC derivatives market that was previously out of scope for MiFID I. The issue with making this...

MiFID II data reconciliation: A practical guide

White Paper By: Duco

Data risk is an increasing challenge in the financial industry, for the innumerable processes that need to be taken care, before reporting the data to the regulators. It is extremely important to stay complaint and maintain data quality for Markets in Financial Instruments Directive II (MIFID II) during data reconciliation. Duco Cube with its powerful and flexible reconciliation platform...

CORE Security and the Payment Card Industry Data Security Standard (PCIDSS)

White Paper By: CORE Security

What are Pci Dss Standards and their requirements? The Payment Card Industry Data Security Standards (PCIDSS) is a set of comprehensive requirements for enhancing payment account data security and forms industry best practice for any entity that stores, processes and transmits cardholder data. Is the payment card data security is worrying your business? The intent of...

Pay Now or Pay Later:The Case for Investing in Contractor Qualification & Management

White Paper By: BROWZ

Though it might seem cost-effective in the beginning, hiring the wrong contractors could turn out to be extremely expensive in the long run. Without proper screening of contractors, you could be hiring unqualified, uninsured, and unsafe workers. This may lead to an accident occurring at the work-site which could lead to a string of problems and uncertain legal and economic consequences....

Supply Chain Finance:Invoice Financing,Factoring And Discounting

White Paper By: Xoomworks BI

The supply chain finance is ready to be addressed, whether you see today’s trade credit situation as a business ethics issue or a technology readiness issue. Getting the “buy chain” flowing is essential to maximizing potential growth. In this white paper on “The ‘buy chain’ – the next place for world-class focus,” learn more about the supply...

follow on linkedin follow on twitter follow on facebook 2018 All Rights Reserved | by: www.ciowhitepapersreview.com