Operations in commercial banks

Operations in Commercial Banks

The Banking System is considered to be one of the most crucial aspects in the global economy.

This is because it is responsible for managing and accounting for close to trillions of financial assets, both tangible and non-tangible. Historically speaking, the concept of banking, dates back to the 15th Century Italy, where this economic entity played a major role in bringing about great development, of a number of Italian city-states and transforming them into formidable world powers in the economic field. Since the time money as a tangible concept has come into existence, the general well-being of a country is closely related to the stability of its economy and in turn all its banks. When we speak in corporate terms, banks could be referred to as another component, in the conglomeration of investment banks, investment manager, finance firms, insurance companies and other related financial institutions.

Commercial Banks are a part of the banking sector and while like all banks, they do deal with all monetary dealings, but they do not issue their own money. In simple words, commercial banks are more distributive in nature, which means that they are responsible for the distribution of notes and coins, that the government of that particular country mints or prints. The various

operations that these commercial banks are involved in are namely, retail banking, business banking, private banking, Investment banking and so on. Retail Banking is one of the primary operations of any commercial bank, it is also the most popular one. Almost everyone uses the services offered by retail banks and would find the concept very familiar. These banks are basically involved in the business of giving out consumer loans, mortgaging, deposits, as well as other customer service contacts like ATMs and so on.

The main service offered here is of convenience like for instance ensuring the accessibility of an ATM from the nearest branch. They also encourage their customers to use more of their services by getting them multiple account openings and so on.

Business banking is not very different from retail banking, the operations herein also revolve around deposit collections, loans and encouraging customers to make use of all the bank’s services, at the optimal level. One of the stark differences between business banking and retail banking is based entirely upon the needs of the customers. Customers of a Business bank would have slightly more sophisticated demands, revolving around the management of their payables and other treasury related functions. Private Banking, on the other hand, takes a very narrow approach towards the banking services that it provides. These banks usually focus on providing exclusive services to high net worth individuals, like for example really wealthy people. Private banking is more of a department within a bank, instead of an entirely independent bank.

Investment Banking, although earlier a part of the commercial banking activities, was separated by the repealing of the Glass-Steagall act, which took place after the Great Depression.

Investment Banks are usually known to specialize in underwriting securities, trading, providing financial advice and so. While these banks attract most of the popularity and candidates, wanting to make a career out of them, there are many professionals who pursue professional courses like the ones offered by Imarticus Learning, in order to carve out a niche for themselves.