3. Types of Banking and financial institutions

Types of Banking Institutions

Banking institutions are the a trust bank or you can say companies which are mainly known as affiliate of the custodian, sub-custodian subsidiary of custodian or custodian. Let us see some of the types of banking institutions.

Central Banks

A reserve bank, central bank, or monetary authority refers to a financial institution that manages a states or country. In term of currency, interest rates, currency valuation. Central bank holds monopoly in increasing monetary base also by prints the national currency. Central bank functions mostly include managing foreign exchange and gold reserves, implementing monetary policy, acting as a banker’s bank at time of crisis, making official policies regarding interest rates.

Such banks holds superior power to protect country man by punishing banks or institutions for performing any reckless or fraudulent behaviour. Central banks are mostly designed and recognised as an independent and politically free entity. Examples: Reserve Bank of India (RBI) is the central bank of India, Bank of England, European Central Bank (ECB), People’s Bank of China, Federal Reserve of the United States of America, etc.

Retail Banking

Retail banking is the procurement of administrations by a bank to individual rather than to organizations, corporate or other banks. Administrations offered services like savings, money transfers, loans, cheques, cards, etc. The term retail banking mostly recognize as financial institutions for managing an account administrations for individuals or managing retail clients which distinguish it from other banking types. To further understand retail banking refer to tutorial links.

Private Banking

The expression “private” refers to administration services more on personal basis rather than mass population (Retail Banking). Private Banks refer as financial institutions for managing accounts, investments and other services offered by banks to high-net worth individuals (HNI) who are categories as high income professionals or large investors.

Private banks subject to an essential part of wealth management for high income groups. They provide services like: assets management, tax advisory, financial brokers, offered solitary relationship manger. To understand types of private banking and financial institutions in more elaborated way, refer to the tutorial course links.

Investment Banking

An investment bank refers as a consultant or assisting institution for individuals, organizations and governments in raising capital by underwriting assets. And/or performing broker in issuing securities. An investment bank likewise assist organizations in simplifying acquisitions and mergers, trading in derivatives, equities, currencies, commodities by providing auxiliary services. Investment bank does not provide deposit services like commercial banks or retail banks.

Investment bank can likewise be divided into private and public based on information capacities and data obstruction. The private ranges deals with private insider data that cannot be freely disclosed, while public range such as stock examination deals with public data. For more details refer to tutorial course links.

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