Professional Documents
Culture Documents
The Organization & Structure of Banks & Their Industry: M. Morshed 1
The Organization & Structure of Banks & Their Industry: M. Morshed 1
The Organization & Structure of Banks & Their Industry: M. Morshed 1
The arrangement of personnel & departments within a bank to produce & deliver its services. A bank with heavy involvement in consumer loans & deposits is called Retail Bank. The bank which concentrates mainly upon serving commercial customers & making large corporate loans is called Wholesale Institution.
M. Morshed
M. Morshed
Large Banks: This bank is owned & controlled by a holding company whose stockholders elect a Board of Directors to oversee the bank & nonbank firms allied with the same holding company. The largest institutions serve many different markets with many different services, they are better diversified both geographically & product line to withstand the risks of a fluctuating economy.
M. Morshed
The oldest kinds of banking, offer all of their services from one office, though a small number of services [taking deposits, cashing checks ] may be offered from limitedservice facilities such as:
Drive-up windows. Automated teller machine (ATM) Retail store point-of-sale terminals.
M. Morshed
Branch Banking
It serves a rapidly growing region & finds itself under pressure either to follow its business & household customers as they move into new areas or lose them to more conveniently located competitors. Senior management of a branch banking organization is usually located at home office, though each full-service branch has its own management team with limited authority to make decisions on customer loan applications & other facets of daily operations.
M. Morshed 6
Branch Banking----Contd
Branch Banking System
Full-Service Branch Office Home or Head Office Full-Service Branch Office
Drive-up Window
Branch Banking----Contd
Reasons for the growth of Branch Banking:
Shifting of population from cities to suburban communities. Bank failures causes healthier banks to take over sick ones & convert them into branch offices. Growth of business increases the credit needs of rapidly growing corporations.
Branch Banking----Contd
M. Morshed
A bank holding company is simply a corporation chartered for the purpose of holding the stock of at least one bank.. Banks acquired by holding company are identified as Affiliated Bank. Any company has control over a bank or over any company if (A)The company directly or indirectly or acting through one or more other persons owns, controls, or has power to vote 25 percent or more of any class of voting securities of the bank or company; (B)The company controls in any manner the election of at least two directors of at least one bank or company; or (C)The Board determines, after notice and opportunity for hearing, that the company directly or indirectly exercises a controlling influence over the management or policies of the bank or company. (D) Prior approval taken from Fed.
M. Morshed 10
M. Morshed
11
Greater Efficiency Different types of Services Lower possibilities of Failure Higher & stable profit
M. Morshed
12
Reduce competition Increase service charges Ignore the credit needs of small towns & cities Accept higher High
M. Morshed
13
Financial Holding Companies (FHC) Offers broadest range of financial services Each affiliated financial firm has its own capital, management, profit/loss which are separated form each other. So, each firm has protection against company-wide losses.
Representative Offices: Facilities operated in a different region or nation from a banks home office that provide links back to the home office. Agency Offices: Offices that provide limited services to customers in distant markets, such as credit & cash management services. Full-Service Branches: Offices that provide the same full menu of services as a banks home office. Shell Branches: Special offshore facilities set up to raise new funds & avoid some regulations.
M. Morshed 15
2.
3. 4. 5.
The financing of exports from the home country to host country. Providing services to foreign nationals who have come to study or work. Tapping the Money Market for liquid funds. Assisting with the flow of foreign capital into the most promising local investments. Avoiding regulatory restrictions on banking in their home countries by entering the more open local market.
M. Morshed
16
3.
4. 5.
6.
7. 8.
9.
American Express Bank Ltd. Citibank N.A Commercial Bank of Ceylon Limited. Habib Bank Ltd. National Bank of Pakistan Shamil Bank of Bahrain E.C. Standard Chartered Bank Ltd. State Bank of India The Hong Kong and Shanghai Banking Cor. Ltd.(HSBC)
M. Morshed 17
M. Morshed
18