Qu'est-ce qu'une banque commerciale? (Document en anglais)

What’s a commercial banking

A commercial bank is a type of bank that provides services such as accepting deposits, making business loans, and offering basic investment products.

The term is generally used to distinguish retail banking services from investissement banking , commercial banking or wholesale banking.

Retail banking is when a bank executes transactions directly with consumers, rather than corporations or other banks.. It may also be used to refer to a division of a bank dealing with retail customers and can also be termed as Personal Banking services.

Commercial bank can also refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses, as opposed to individual members of the public (retail banking).

Séparation entre bank d’invest et comm

investment banks participate in trade financing activities. In theory, investment banks and merchant banks perform different functions.

They raise funds for businesses and some governments by registering and issuing debt or equity and selling it on a market. Traditionally, investment banks only participated in underwriting and selling securities in large blocks. Investment banks facilitate mergers and acquisitions through share sales and provide research and financial consulting to companies. Traditionally, investment banks did not deal with the general public.

Separation between comm. And wholesale banking

Wholesale banking is the provision of services by banks to organisations such as Mortgage Brokers, large corporate clients, mid-sized companies, real estate developers and investors, international trade finance businesses, institutional customers (such as pension funds and government entities/agencies), and services offered to other banks or other financial institutions.

Main functions of commercial banking

Primary function of commercial bank includes:

Accepting deposits

The most important activity of a commercial bank is to mobilize deposits from the public people who have surplus income and savings find it conient to deposit the amount with banks depending upon the nature of deposits funds deposited with bank earn interest

more the rate of interest ins higher more the public are motivated to deposit more funds with the bank

Granting loans and advances

Such loans and advances are given to members of the public and to yhe business community at a higher rate of interst than allowed by banks on various deposit accounts

The rate of interest charged on loans and advances varies depending upon the purpose period and the mode of repayment

The difference between the rate of interest allowed on deposits and the rate charged on the loans is the main source of banks income

Secured loans

A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. The debt is thus secured against the collateral — in the event that the borrower defaults, the creditor takes possession of the asset used as collateral and may sell it to regain some or all of the amount originally lent to the borrower

Unsecured loan

Unsecured loans are monetary loans that are not secured against the borrower's assets (no collateral is involved). There are small business unsecured loans such as credit cards and credit lines to large corporate credit lines. These may be available from financial institutions under many different guises or marketing packages:

Secondary functions

Issuing letters of credit travelers cheques

Providing customers with facilities of foreign exchange

Transferring money from one place to another

Issuing demand drafts and pay orders

Providing reports on the credit worthiness of customers …..

Maintain and service savings and checking accounts of its depositors

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