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Assets of Commercial Banks
Assets of Commercial Banks
Assets of Commercial Banks
They can be categorized as follows : 1. CASH BALANCES : Every bank holds cash balances to meet its customers requests for withdrawal
2. MONEY AT CALL AND SHORT NOTICE : These are short term loans ( between 1 day to 15 days ) made in the money market. The loans are repayable at the insistence of either the borrowers demand or the lenders demand
3. DISCOUNTING / PURCHASING OF BILLS OF EXCHANGE Banks provide credit to businessmen against discounting of bills. The bill finance is repayable either demand or after a period not exceeding 90 days, whichever is EARLIER. Thus, they can be converted into cash in less than 3 months.
4. INVESTMENTS : The investments made by a bank form the major part of its assets. The investments of a commercial bank can be categorized as : a) Investment in SLR securities.
b)
5. LOANS AND ADVANCES : This is the most important item in the banks asset column. These include the following:
1.
2. 3. 4.