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.