Deposit Management Essay

4328 Words Oct 31st, 2008 18 Pages
MANAGEMENT OF DEPOSITS
IN COMMERCIAL BANKS

Before going in to details of Deposit management
One must under stand the format of balance sheet

THIRD SCHEDULE TO BANKING REGULATIONS ACT 1949

FORM A
FORM OF BALANCE SHEET

SCHEDULE AS ON 31/3/----
(Current year) AS ON 31/3/----
(Previous Year)
CAPITAL & LIABILITIES
Capital
Reserves & Surplus
Deposits
Borrowings
Other Liabilites & Provisions 1
2
3
4
5
Total
ASSETS

Cash & Balances with RBI
Balances with banks and money at call and short notice
Investments
Advances
Fixed Assets
Other Assets

6
7

8
9
10
11

Total
Contingent Liabilities,Bills for collections

Introduction

Deposits represent the most important source of
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non-banking finance companies, co-operative banks, post offices, investment in shares/ debentures).

The main advantages which the customers get by keeping deposits with commercial banks are as follows:

 Liquidity or easy withdrawals by cheques/ ATMs for meeting day-to-day expenses.. Bank deposit accounts (current and savings) are liquid financial assets; even term deposits can be repaid before their maturity at the discretion of the bank or loan can be obtained against security thereof.

 Quick and convenient transferability of funds to third parties and to the depositor's other accounts by cheques /debit card/ clearing/ collection systems

 Safety of funds.

 Earning interest on savings and term deposits etc.

 Record keeping via statements of accounts and pass books.

 Availability of other facilities, e.g. safe deposit locker, credit/ debit/ A TM cards.

1.2.3. For the economy

Commercial banks mobilize a large portion of the savings of the community and deploy the same in loans and advances to the industry, trade, agriculture, infrastructure, services sector and other bankable economic activities, thereby helping the economy to develop.

This function of the banks is called 'financial intermediation'.

Banks intermediate between the depositors (savers of money) and businesses

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