Scribd
Upload
30 views

Constraints For Bank Management

The document discusses constraints and factors affecting bank management. Legal/regulatory constraints include capital requirements and customer protection laws. Major factors influencing bank market share are inflation, securitization, technology, consumers, deregulation, competition, and globalization of financial markets. The document also outlines assets and liabilities of commercial banks, noting deposits and loans as major components.

Uploaded by

mashfaq1000
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
30 views

Constraints For Bank Management

The document discusses constraints and factors affecting bank management. Legal/regulatory constraints include capital requirements and customer protection laws. Major factors influencing bank market share are inflation, securitization, technology, consumers, deregulation, competition, and globalization of financial markets. The document also outlines assets and liabilities of commercial banks, noting deposits and loans as major components.

Uploaded by

mashfaq1000
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 12

Constraints for Bank

Management

 Market constraints (compet. Rates)


 Social constraints (servi to charities etc.)
 Legal and Regulatory constraints
B/S composition (cap. Requirments etc.)
customer relationships (cust. Protectn laws)
Major factors affecting bank
market share
 Inflation and volatile interest rates
 Securitization
 Technological advances
 Consumers
 Deregulation
 Despecialization and Competition
 Globalization
 Money and capital markets
Inflation and volatile interest rates

 High interest rates lead to higher cost of


borrowing
 Failure of financial institutions (due to
short-term borrowing and long-term loan
investments)
 Large default of borrowers
 Decline of market value of assets
Securitization
 Issuance of debt instrument from defined
pool of loans (e.g. credit card loans,
mortgage loans, car loans etc.)
 Securitization vs. Collateralization
 Packaging and selling the loan
 Unbundling lending process (originating
loan, packaging, servicing, funding)
 Bank’s liquidity and access to secondary
market
Technological advances
 Impact of technology on competition
 Reduction of processing costs of financial
transactions
 Specialization in securitization by large
Financial Institutions
 Economies of scale (high vol, low cost)
 Reduction in costs of screening and
monitoring loan portfolio
 Economies of scope (through internet)
Consumers

 Greater education and personal money


management
 Internet and on-line banking
 Greater volatility in flow of funds
Deregulation

 Reduction or elimination of laws


 No geographical limits on banks
 Bank mergers and failures
 Collaboration of investment banks and
insurance companies
Despecialization and Competition

 Changing structure of fin. Serv industry


 Bank Desp. – One stop shopping center
 Overlapping of fin. Serv. by banking and
non-banking firms
 Increased competition
 Trade credit to customers
Globalization

 The world as a single market


 Globalization vs. internationalization
 Global integration of fin. Markets
 Increased competition
Money and capital markets

 Money markets – short term funds


 Capital markets – long term funds
 Large Cos greater access to cheaper
funds thru commercial papers
 Decline in bank market share of fin.
assets due to competition
Assets and Liabilities of Commercial
Banks
 Assets
 Bank credit
 Investments (govt. securities, other)
 Loans (commercial and industrial, other)
 Interbank loans
 Cash assets (4 – 8%)
 Other assets (building, equipment etc.)
Assets and Liabilities of Commercial
Banks (contd.)

 Liabilities
 Deposits (transaction, non-transaction)
 Borrowings
 Other liabilities
 Equity
 Bank’s own capital (5 – 10%)
 Banks – a high leveraged org.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy