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CLASSIFICATION OF BANKS

CLASSIFICATION OF BANKS. & CREDIT CREATION IN BANKS. CREDIT CREATION . DEPOSITS PRIMARY DEPOSITS DERIVATIVE DEPOSITS. MULTIPLE CREATION OF CREDIT. LOANS & ADVANCES MONEY AT CALL & SHORT NOTICE DISCOUNTING OF BILLS INVESTMENTS. ILLUSTRATION: MAXIMUM EXPANSION OF LOANS & DEPOSITS.

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CLASSIFICATION OF BANKS

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  1. CLASSIFICATION OF BANKS & CREDIT CREATION IN BANKS

  2. CREDIT CREATION • DEPOSITS • PRIMARY DEPOSITS • DERIVATIVE DEPOSITS

  3. MULTIPLE CREATION OF CREDIT • LOANS & ADVANCES • MONEY AT CALL & SHORT NOTICE • DISCOUNTING OF BILLS • INVESTMENTS

  4. ILLUSTRATION:MAXIMUM EXPANSION OF LOANS & DEPOSITS

  5. DEPOSIT MULTIPLIER & CREDIT CREATION FORMULA • K= 1/r K= Deposit multiplier r= ratio of cash reserve to deposit

  6. LIMITATIONS OF CREDIT CREATION • ADEQUATE CASH RESERVE • AVAILABILITY OF SECURITIES • QUANTITY OF MONEY IN CIRCULATION • ATTITUDE OF PEOPLE • POLICY OF THE CENTRAL BANK • NATURE OF BUSINESS CONDITIONS • LEAKAGES • BEHAVIOUR OF OTHER BANKS • USE OF CHEQUE

  7. CLASSIFICATION OF BANKS • COMMERCIAL BANKS • INVESTMENT BANKS OR INDUSTRIAL BANKS • EXCHANGE BANKS • CO-OPERATIVE BANKS • LAND DEVELOPMENT BANKS • SAVINGS BANKS • CENTRAL BANKS

  8. BANKING SYSTEM • BRANCH BANKING • UNIT BANKING • CORRESPONDENT BANKING • GROUP BANKING • CHAIN BANKING • DEPOSIT BANKING • INDUSTRIAL BANKS • MIXED BANKING • INVESTMENT BANKING • NARROW BANKING • UNIVERSAL BANKING • LOCAL AREA BANK

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