BANK ASSETS

Bank's

assets comprises cash, money at short notice, bills and securities discounted, bank's investments, loans sanctioned by the bank, etc.
Banks

cash in hand, cash with other banks and cash with central bank (RBI) are its assets.
When

a bank makes money available at short notice to other banks and financial institutions for a very short period of 1-14 days it is also treated as bank's asset.

Apart from these items bank always make money available to people on the form of loans and advances.

Bank liabilities

Bank's liabilities constitute

1.

The share capital, the contribution which shareholders have contributed for starting the bank
Reserve funds are the money, which the bank has accumulated over the years from its undistributed profits Deposits are the money owned by customers and therefore it is a liability of a bank. Apart from these items a bank can borrow from central and other commercial banks. These borrowings are also treated as bank's liabilities.

2.

3.

4.

Bank service products

Issuance of cheque books Issuance of credit and debit cards Provide and electronic fund transfer between banks ATMs Provide overdraft Currency exchange

Bank Revenue Model

Interest Income Non-Interest income Interest Expenditure

Non-Interest Expenditure

SPREAD Interest income interest expenditure = spread

BURDEN Non interest expenditure non interest income = burden

Spread Burden = Profit

Spreads needs to be reduced due to competition, and guidelines by regulators.

So in turn burden should also be reduced so that one can gain profit.
To reduce burden, one increase fee based income. should

Fee Based Income

Any income generated out of a transaction which does not actually involve the funds of the bank can be considered as fee-based income

Fee based Income

Banking Product

Third Party Product

Banking Products

The products that is of bank only

Third Party Products

All the products that are the products of other manufacturer are sold through banks.

These are the major fee based income of banks, to reduce burden.

1. Insurance

INSURANCE

Life Insurance

Non-Life Insurance

Life Insurance

Insurance that gives the money after death or after the completion of maturity

In this savings can also be done

Bank gets some commission against insurance

Non-life insurance

Also called general insurance Done against the protection of some damage or loss Generally compulsory for all like car insurance. No savings in this

2. DEMAT

It is a dematerialized account for an individual or organization to trade in share market or debentures in the electronic form instead of paper form.

Contains
1. Investors 2. Depositories
NSDL [national securities depository ltd.] CDSIL[central depository of securities India ltd.]

3. Depository participants 4. Issuing company

No stamp duty
Immediate transfer and registration of securities Customer is secured

3. Gold Coins

Gold important element in our economy Its value influence inflation.

In form of gold coin or gold bar

Assured purity of 99.99% Temper proof packing

4. Mutual Funds
A mutual fund is a trust that pools the savings of a number of investors with common financial goals The collected money is invested in various instruments like debentures, shares, etc. Risk limited Easy investing Transparency

Why Banks Prefer Third Party Products

To enhance customer satisfaction

To make profit from these products To sustain in banking competition

Why customer go to bank for these products

Due to trust on banks

Multiple service under one roof As there is less chance of fraud.

Why vendor sell their products through banks

Bank has large network more customer

Customer trust more on banks large sale Reduction in the cost of infrastructure and others.