Banking Business

Understanding Banking as a Business¶

The banking industry players deal in a variety of products from savings accounts to loans and mortgages, offer various services from check cashing to underwriting, cater to different types of customers from individuals to large corporates, serve diverse geographies from rural villages to cross-border operations. Thus the banking industry is made up of several types of banks, with their own objectives, roles, and functions

Retail Sectors¶

Retail banks are the banks that cater to the needs of individuals and the most common format of banking that we experience. They include deposit accepting institutions like saving banks loan associations, credit unions, thrifts, and other savings banks.

Individuals are the targeted consumers for retail banking and banks offer a variety of products and services to these consumers including savings accounts, safe lockers, fixed and recurring deposits housing loans, consumer loans, personal loans, and unsecured and revolving loans, such as credit cards.

Retail Banking includes exposures that fulfil the four criteria of orientation, product, granularity, and low value of individual exposures: These retail exposures are laid down in the Basel Committee on Banking Supervision document "International Convergence of Capital Measurement and Capital Standards. Product criterion exposure means exposure on specified products specified as revolving credits, lines of credit, overdrafts, term loans, instalment loans, student and educational loans other leases, and small business facilities and commitments, It also includes housing loans.

Commercial¶

This category represents corporate and business banking and includes commercial and foreign banks. Commercial banks offer similar kinds of products and services as retail banks however, as retail banks target individual consumers, commercial banks are focused on corporate, Institutions, and commercial businesses. Products and services include consumer and commercial deposits. business loans, mortgage and real estate loans, overseas operations, investment in high-grade securities, and industrial loans

Investment¶

The products and services of this category include managing portfolios of financial assets, trading in securities, fixed income, commodity and currency, corporate advisory services for mergers and acquisitions, corporate finance, and debt and equity underwriting. Trading activities include trading both on behalf of clients or on the bank's own account

Central Banks¶

Central Banks, are bankers and every country generally has one central bank that occupies a central position in the banking system and acts as the highest financial authority. The main function of this bank is to regulate and supervise the whole banking system in the country. It is a banker's bank and controller of credit in the country

Banking Divisions¶

• Banking Operations: Personal & Commercial Banking comprises of personal banking operations and transactional banking
• Clearing Functions: Internal and External Reconciliations & Internal and External Clearing
• Asset Management: Provide asset management products and services
• Wealth Management: High net worth clients with a full suite of investment, trust, and other wealth management solutions
• Treasury & Risk Management: Provide custodial, advisory, financing and other services for clients to safeguard assets, maximize liquidity & manage risk
• Cards Issuance and Management: Issuance of credit cards and managing credit and operations for cards business
• Trading Intermediary: Acting as Depository Participant Registry, Exchanges, Trading, or Broker-Dealer
• Enabling Functions: Human Resources, Finance, Banking Technology, Surveillance, Legal and Compliance