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    Banking notes

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
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    14 views24 pages

    Banking

    Uploaded by

    Lutfa Salim
    Banking notes

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    of 24
    \ \ CENTRAL ANKING Evolution of Central Banking Sone sat banking originated in China-an others claim tat i Som ctvities of Venetiaz Merchants i the middle ages. We shall not bother aursslves vith tis Ue of tile history Our purpose wil be wall served if we simply noe that wht may be calles oseen Dbenking developed a a result of people's desixe fora lace io keep theirmaney and other valuables saitly.Inthis pesiod, money consisted only of very previous metls, suchas gold or silver. [zt js anny people kept hee vase ith th King ofthe cut. Thee were many rasta for The King waste only person in whom many people had coutidee and teefore ste, end 2 is ey t lea hisfet money ox valuabes witha person hey don rst. The Kinga poate ant could te rled upon to defend his palace sucessfilly i case of atack. Money In with he Ki ‘vas therefore sonsidered o be much safer than ithad been deposited anywhere lee. fore became very luctant 9 leave thei {hey were no longer eonsidere safe, They ‘a look ale with he King for sie keping bee 10 lend him snes he ofen delta’ The Toray and ti edt the ceveioses mbites WE Te was serpin 1690 appv commercial insu esniynodero boro om the ble td led tthe Goversnsan bank could be sued People therefore ft configent of lending ie we bark. ene ‘erated, they ccald take ic te court torecover their money or valuables, lite he gla ere ned mot sabe, note they desk in goid. bat ise they ad safes and had wor te confidence of te community as highly respectable members the sociegy, ho could be rusted, “These gost received valuables fom she public underco (0 cezay the valuables on presentation of the receipts te the goldsmith for payment, te deposit ‘er ie cei Zr payment fe hs wa the eee weans-ot paviment, This asthe fist stage in the dev exchenge for eceips, which ‘hey issued. The receipts Rather thn going in person vo tence: ould simply send somebod® to she g>idem ed by the goldsmith came oe encouraged the zoldemith to undertake a second Function, that of issuing his own note. which oot similaly used as a reams of payments, This i hy all erly banks were banks of seus, They founc practice vey profitable, for one they had eared tbe conidence ofthe comnescalcenni, “ever Sind wer people wished to change ther notes for setul ioney. ‘These led to dhe third stage in the development of banking. The goldsmiths noticed that fewer and fewe people changed their notes fr actual money and eealized that they coulé safely lend out some of money deposited with them, provided they Kept enough o ensble them to pay those who waned aeeh oO i ‘mene In ime dhey found that only very small proportion of total deposits were necessary fr ‘his PUrpeee, ao hey leat whet wes left afer uring this proporson aside, fa his vay, the erly beakers undertook the ection of lending money. The goldsmiths made a charge for leniing money The profitability ofthis busines led to the fourth stage inthe evelusion of banking. Rather than waiting inthe ivory 10 whereas for de pubic to deposit valgbles with them, the goldemihssee-oucin acacs a is ernst. They did this beghuce the more deposits hey aequired the more lending they could undertake and the more profits tha made, The fh stege came with ‘As we noted earlier, the eanly banker issued reesips in cemur forthe valuable which he received gt frst ie could repay these deposits ony to the ‘erson or persons wi had actly deposited te valifibles with him. Insime, howevet.acrasice are oust is esd. This is how the phegue-criginetes, ‘3001 development helped te Bring abou lending by means of overdraft, Finally as legal restriction to note issue was introduced, banks found it more profkable a conven 'o concentrate on ataeting deposits than on issuing notes. Accordingly, banks ef deposits eventually ‘placed bank oF issue, and note issue became te prerogative of ental banks therefore were the various stages in the evolution of tasking. With this in mind, we can ace ofa bank or banking. We must star by making i clear that banking is ended any precise 01 ‘he cenaries. lsc, given that hee are different syzes of tanks: i= Cons) al Banks. Saving Banks. Merchant Banks, Industrial Banks, Development Bens et 6 narrow mesning and call ha: a definition, or ‘One could, of course give the word “penk’ or “banking 8 definition. The Oxiord Dictionary detines ¢ one could give ies much wider meaning, end sl eal bank as ‘an establishment for the custody of money wfc it pays out on customer's arder, This i « nanow definition, Others have also defined banking te ‘a system whereby individuals putin money ito an institution (inthis ease a bank ) either for safes the form of curent accounts or for interest, purposes. Oilers vbseovs thal s modersbanier can be defined as 2 “Soar in dab; and modem aenking 22 dealing in debts. Technically the money thatthe banker deals ins simply the deb helabe creates gains himvherself, and he/she makes living by buying and selling this money. ‘Thus, a bank may be defined as ‘an institution which collects safeguards them and makes themavailabe to the true owners when they require them, but also loans out sams noe immediately required by their true owners to those Who are in. position to provide sufficient security’. Research Findings inthe form of pamphlets, books, ourals and Deriediests Sal in pursuit of improvement in the welfare of the insurance industry the instioue, i conjureton with the Government and other players inthe ins, helpdt establish the College of Insurance which, bedside preparing student fr insurance exams, facies seminars and workshops foremployees fom sound the region. Algo with conjunction with the Insffance Training and Education Tras, tne inst has seen the need to introduce a local insurancelfiploms, which is suited tothe local insurance teed. The institute has undertaken this challege aeieing the decline in the number of stuiems, ‘iting for foreign insurance examinations For instanefthere has been a general outer that the sete expensive. This is parlyt2 lame forthe declining earciment. The iat industy. [sues re The sociation of Kenya Insuers (AKD, another 9 procuets they ofe,Iralee plays an active rele involved inthe running ofthe college of insurance, Phe aim ofthe association isto previde courses sn ‘csining thar are unequaled in te region, The ssocition is also establishing ways of gevtina ciesert the insuring publi. Iis therefore aking car ofthe interes of the insuring publica wel = ot all sbour insurance. It also plays social rele, facliing getcagethers suc 2s Sune! sion forums which are addressed by projfinent persons from bots in andout of he insurance fant the Kenyan economy afliscussed a the forums por body inthe Kenyan insunarce induct, ans the insuring public with curate date on the 3 promotion of insiranc» education. ad iti lly at isurance companies ate able to prov insurance companies. A seniral sank performs the following functions az given by De Kock ant css FUNCTIONS OF CENTRAL BANK spied by the moforky 0 4 ‘Regulator of Currency ‘The cena bank isthe bank of issue I bas the monopoly of nayisue, Notes isuee by it crculae ss legal tender money. Ithas its issue department hich isues notes av coin to corunersiel bonis. Coins ae manufscrured in the goverment mit but they are putin cents bank old ard foreign secures bea & es issued. [other ecunteies a tou to be kept against note iesue hth serve Bank of Inde is required o i ses in gold and Rs 85 crores in foreign secures. There is no lint ro the isnue of notes afer ‘sping this minimum amount of R200 coves in gold and foreign securities ‘The monopoly of suing notes vested in the cenal bank ensure unionnty i the nates ised "2 ui Tibrings stamiityn he ‘ionetary system and creaies confidence among the public, The central bank ean reste. or expant the supply of eash according tothe requirements ofthe economy. Th t provides elasticity tothe ‘monetary system. By having @ monopoly of not issue, the central ban alse comtrola the biniine vaste being the uitimate souroe ofcash, Last but not eat, by enmasing emonopely ataate "Sue the cel ban. the governments ble ara poss Kom-puntng rors whos con ‘ety Tow as compared with ther face value {sguz uf mates, In some countries he smoUT Proporssa between 25 to 4D percent ofthe tot gold and foreign currencies i requ nis and advisers othe respective Beis does aot Banker, Fiseal Agent and Adviser to the Gove Cental banks everywinere act a bankers, acal governments As b ‘makes shorter: loans to the goveinment pays interest on them, and finely repays chert on ‘The central bank also svises the svermient on such economic and maney maters as controlling inflaton or defation, devaluation @ or revaluation of dhe currency, deci financing, balance of oct, “Central Banks everjuhers operate as bankers tothe sas not only becaice it venient aad economical to the ste but alse because ofthe intimate Connection bet outy De As po ‘Custodian of Cash Reserves af Commercial Banks Commessial anks are requied byl to keep asseriesecual i a.cervsin permosiage of th ise ‘and semand deposits liabilities with be cena banks. [18 on the basis of these reserves tha he ental bank transfers funds ftom one bank to another to facilitate the slearing of cheques Ths he ‘cinta bank acts asthe eustodian ofthe cash reserves of commercial banks andbelos feciitaing ther ansations. There are many advantages of keeping the cash rserves ofthe commercial banks with the canal bank, scsording 19 De Kock. iat iv reserves in the contrat bank ig source Bt gees ie ancl exsis ar emergencies cpa creation Bo ing these cssh reserves the cera bark can Lastly, the central hank can pasuide anal Custody and Management of Foreign Exch The central bank keeps and manages th rts, Te also buys and sells foreign currencies at inverational 3 ASME es of che domestic comesey iq aun af eign currencies. Ie holds hes keeping with its obligntions as a mecsber of he Intemational Monaiery Fund an bility in foreign exchange rates. Further, it manages exchange centro arztstion by supplying foreign currencies co impomers and pereons visiting foreign count in Keeping with te rules lad down by the government Lender ofthe last Resort De Knoek regards this function as sine qua ng central banking. By granting accommodation ‘he form of re-discoumts and collateral advancego commercial banks, bill bres an tiers, cr the lender of he lat resort, The Sera bath country for sollanse, Ir aes as the basis of weasury bills, government secure is give emporary accoramodarion tothe conigperval banks or aiscount houses directly through he “back door”. The difference between the tw methods stat lending athe font docs is atte bunk rate and in the second case atthe market ate, Thus te central banks a lender of hs resort isa big source of cash and also influences prices and suakets rates, der of the last reson through ciseaunt house on bonds at“the font door”. Tye other methods Clearing House for Transfer and Settlement | 4 bankers” bank, the central bank acts as «clearing house for uansfer and saclerent af aurial lai 2Zsomimescial banks. Since the central bank holds rezerves of commercial Buiks "anaes funds from one bank to other banks ofacilitae clearing of cheques. This is daa hy aking sansiee tees flanksbaeping. To ranser at sete slaims of one banic upon others, ths cenmal bank operates «separate department i bg cies a ane censes. This department Laowa as the “clearing Gouse", And t renders the fervice fee to bank ats a «clearing agency, commercial banks to set their claims tone place. [alae economies te ust af esoney “It is 31 ‘esonomizing cash and capital but is also a means of esting at any cme the community is mantining” cf liquidity which & 7. Controler of Credit ‘eos imporaet fon ofthe eal aio conto i re ret pow By adopting such tuethods, the central bank eso influence anfcontrel credit creation by commercial banks 9 ‘order fo stabilize eoanomis acuity inthe eo Besides the above note funtion, the cencal banks in # numberof developing eounies have been entristed withthe responsiblity of developing’ song banking system to mee" the expanding eeguiremeus of pictur, indus, wade anicommere. Acorn, the cet! banks postesses some ey tbe lsuing of licenses the regulatohoftrane expansion; ose that every bask malstns se ‘minimum paid up capital and reserves as provided by la inspecting or auditing the asveamts

    size athe exes esate 2 credit and vie vere. Ica sso be said athe larger Teaeve rai, te lower the power oF aban create ret as vice versa equi When the central bank raises the reserve rato of tfeommercial banks, it mean thane banks ave requied to keep more money wih te central bald onsequenty, che excess reserves withthe ‘omnierial bans are ceduced and they can len lf than before. This canbe explsined mere ciestly ‘wth he help ofthe deposit multiplier formulas If bank has K£1000 in deposit its Legal ninimum iio or the required reserve ratio, BRris 20 percent, iccan create credit tothe extent of KES000. ‘This bunk is sid to be “losned up" to the limit of MPS000 and it canner sete more deposits ies reese increase further. [f the Rr is now reduced ftom 2Mfpercect to 10 pereat the sales can caste credit ro ‘he extant of KE19,000 L xD ot «19010000 j Be Sto | ‘Therefore, the bank i loaned up to the limit of KE10,000, I the RRr is now increesed to 25 perent fom 20 percent, L xD Ree 1000) ‘The bank wil be loaned up" t the limit of only Xe, 000 able reserve ratio over cpen market opestion. To of credit conto. itis "a barery of the mast, They give the following arguments Variable Reserve Ratio Vs Open Market Opera Toete are divergent views about the superiority of tose who coasider the former as supetior i al bans maze dinscy ‘bank bas imply 9 ma je banks and they have to implsen e ble reserve cato affects th power of efit cretion of the comer ‘umeciazly acti het oe Geciannion for changing the reserves requirements OF immecitely. But open masket operation requrebale or purchase of secwities whic lesikce canstuming process 1 + The effsetiveness of open marker operations dene she existence ofa ba mn ‘organized market fr sequsives. Ths this instrument of eedit contol “Saat be ope sures which [ack such a market (especially de bills enarke), On the other bane. the etied of ve ratio does not require any such market for its operation and ie apoieable esually is nt underdeveloped matkets, ands thus superior to open marset operitions * Further, sine open matke operations involve the sale and putchase of securities an ad \week-o-week basis, the commercial banks andthe central benk which desl a eens a ity pen market operations, supponers of open mi Despite the superiority of variable, reserve ratio ov a tool in contolling credit than vaviatle reserve operations have argued that they are more effetive ratio because ofthe following reasons to control inflaion, they ae forced to bu them. They are, therefore prevented from given mote ldaas to private credit market. On he ober bane 1 the alto 8 caied, the banks willbe requited to keep larger balances with ‘he ceatal bane They wll also be taced with reduced earings, They wil tgrefoe, be induced to sil government secuniges and give more lomns tothe private eredit marke. Tans open market operations ate more eta Cas another sense, open market operations are more effective aan insirument of exe conte th UREA ey CO. 4+) Wen the central bank sells securities to the spvernmect securities, pen market sal and purchase of suc seciies oy cv cents. ben also sieve ther Liquidity postion. Buc they ae not equized te keep any roserves with the canal hack, unlike the commercial banks. + sania, variations in te reserve veto are meant for meking maior 5 was liguiity position ofthe commercial banks. They are, heretore, ot suited fer making 2 sjustments in the votume of available bank reserve, 28 ate done vader open market spesaions uher, 3 technique, reserve ratio can onyffluence the volume of reserves ofthe cormmercist “nk, On the other hand, open matket opera uence notenly 26 fy ac of th is. Thus open market operations are wots effective i influencing tie reserves andlffeit creation power cfhe banks than roracone ie + Last but not least, the techniqu Essrimisatory (2, hurting smal the lager ones) wiigreasisarcfcoen mazker ubiory in is effect, ‘ecan be couchided from the above disussion ofthe relative merits and demerits of the mo techniques ‘bt i order 29 have the bet ofthe two techniques at inorder to have the best of‘ tao. ey steed ye ured joy rather than independent. Ifthe ceaial bak raises the reserve tai. shoud simolaneousiy star purebasing end! not selling, secites x those areas othe court where te gsonetary stringency: On the convary. when the central bank lowers the reserve fants should also sel securities hoe beak which already have econ rer application ofthe two polivies wil abe Selective Credit Contras sone is sialle uses. Unlike the general instants selective instruments cb aor eer ee er Seiouat of sedi but the amount tht is put wo use iff particular sector of the economy. Tae aim of Selective credit conn isto channelise the Dow offi credit ftom speculative an sine undesirable ‘ropeses io socially desirable and economically wil uses. Prof: Chandler defines elective crest onttals as “those without the necessity of cecressng tie A. Regulation of Margin Requirements ‘This method is employed prevent exces speculators. The sentra bank fies min urements on bags for purchasing or smying secures they are, in fac, the percentage ofthe valbe ofthe security that canner be borewed 2 lene or Jenn other words, the maxinum value of oan which a borrower can have from tee hanks be (he basis ofthe szcurty, For example, ifthe central bank fixes 10 peresnt margin onthe value of¢ security worth K£1900, then the commervial bank can lend only KE900 tothe halder of the security ang keep KE100 ith tI ‘ental ani raises dhe margin © 25 percent, the commercial banks ca lend only K750 agsnsi security of K£1000, {ft cental bank wants to curb speculative activities, twill aise the ara FequirementsOn the other hand, it wants o expang ere, reduces the margin requisemeats B. Regulation of Consumer Credit > eto of selective eed cons] which ims atthe regulation of consusser is urchase finance. The main cbjecive ofthis instrament i to tegulste sedi: by consumers in order to buy di paedn Purpose, tie cenal bank employees" two devices:- 4+ Minium: down payments; and + Meximum periods of epayment Suppose a icyele costs K2500 and credit is availa fom the commercial banks fr its purchase. ‘The cena bank may fix the minimum down pay 0 50 percent ofthe price, and she musissumn petiod of repayment to 10 months. So KE2S0 wal ifthe minimum which tke consumer will neve to pey ‘0 bank a she time of purchase of te bicyle and tif remaining amount is en equal insaents of ‘#25 each. This facility will create demand for bcales. Ths he bascle indutcy mld expand slong with te elaued indstses euch a yes, cubs, spate prs, ete. and this may lead to inslationary situation (rise in pres) inthis and other sedans of oe sony contol his, the central enka tegen payee 79 _maximum period of repayment to thre insallenents1S0 the buyer of bicy sles wil each, Therefore, if the cent! bank finds slump in particular industes ofthe eccnomy, it reduces the ame cf down payments and increases the maximum periods ef sepayments. Reducing te lown payrenss tend inetease the demand for credit for particular durable consumer goods on which the este bank hly pevment te other han the wing consumer erect the maximum perioas 3 ‘This insures has its drawbacks, It is cumbersomdfechaically defective and diffcats wa sue it bas 2 unmow base, [tis applicable o 4 paula class of borrowers wtose iemand ‘forms an insignificant part ofthe total credit required Hfiherefore, discriminates beoween diferent types ofPorowers. This method affects only persons wits limited incemes and leaves out higher income group Filly, i tends to misillocatesscurces by shlting chem aveay from industries which are covered by credit regulations and lead othe expensicn of ter industries which donot bave any credit esis C. Rationing of Credit ‘The wide use of credit rationing asa method of contrllng credit vias made use of only in secent exes peuleuitly alice te Fist Word War o contol the excepsonaliy dificult eonciiens reiting tom war ‘and postwar inflation. times when the demand for credit exceeds te teal availabe reseurces, the obligation of the central bank to divide the available funds in some definite way arnong tne competing needs. The sering of credit quotas (Le. 25 percent of al credit mist goto agriculture is the only decisive method which the central as in order prevent excessive crest demands on he oe of business Direct Action (Central bank in all countries frequently resort di in te form of “direeaives" issues from tie tte ‘hich the central Eanks want t enforce immediately against erring tanks. For example, the cetel bank: hich a ma ign against commercial banks, Direct setion comer banks to follow e particular policy, is policy may not be used agains: ll banks resting them from granting advancelfgsint the collate] of ceria commodities; may also charge a penal rate of interest ftom tho banks which wan: borrow done + Sevced preserted limit, The central bank may even theafes a commercial bank tobe taken cver oy ic imcose Fails to flow its policies and instructions. 5. Moral Suasion Moral suasion ithe method of ges sugpesion ang of aie ste ora! bane bank. The exeesive Mod of he od tan ele ina ofthe bes of comet as teaoae cre ee ac fa pariular money policy inte comext of eee conus stustion tat opeele oe s fallow i land, where the cencal baak exesises gett moral influence in leader by he banking community. Her, the cota 38 meniber banks through mors. suation, Howeve: because there are over 15,006 comieriel bers fot subject to the restietions af he Federal ‘As already note, oral uason con ony low the leas of she central tank. Ts de Svaden andthe Hs the financial circles and is accepted as the financi banks successfully exerts its sbbering influence on in USA, meral suasion hes not been much suces sm 35 there ae aot mesabers ofthe be comercial banks are prepared he svength ofthe cental bank and the prestige Publicis . he central bank al aad lables ofthe commercial publishes dara lating to money. lest proc oyment, and of sepia and mene 2 =r Way of exerting moral pressure on the comercial banks. he Sea is nak the public aware ofthe policies beine adopted by the comme: verse the cate! ban othe light ofthe prevaling economie conditions inte county I cannot be sald with deiniteness about the sucess ofthis method, I ore-supposes the existence of ex cated ané knowledgeable public about tte monefary phenomena. But even in aévance conics 32 Devceniaye uf such person in negligibie. Ics, weet, higaly doubt if tey cen seer any mora Pressure on the banks to stitly follow the policies the ceatral bank Hence, publisicy as aa instument of selective credit contol i only of acai interest @ ithe Peed Chapter 6 foe Functions of Commercial Banks 1 MEANING? ‘Tha wor ‘ans Udine Seno cominaial bank, Its of German cng hough sie pros ee i iin othe Pec word Ba Talia word ‘Bape Chink’ TweatthCenfy Dcdonay deta ank 1 an “isttaon fo te feepg, lending and feanging, cof rote. Economists egal defied oak ph ‘tr fs oan exchange stony ste bes by Keath Dies «Beak wa peratons we conecred with h secession i tegen pl for te puro of evan Sues on ele a ser sal ae ‘Oral Sang Batis cons of ane dept oes cen ot ope per) moet giving Eek ep exchange oe bo fschugs vert ole he scr or seed promise of tiers to regy, #7 Ths ask ah nsesion we top dons fom he bl ot kar dees ois by eeting rele dle fom ae ‘nai inion ety chnot set ee thous ay my crept pnt nd pking avons 2 RUNGioNs BF CnmeenCus sais Cnt crm vin of econ ic xa edie seen arts some ea) eae, (mses | Sete O)apauy saves it (9 wrecgee seis weet Sarton Scan ag "RE Ko ay ond eg 6 1 Sie ee eng .38. 6 Monetary Seonomice “0 Acrtn Deans ‘thet con of ick ni enka hemi ‘ne nig ti mony nay win egw elgg nt. Newsday thn cpt of po {gto et tk pe ll ‘teat ones fa do towed yeas of ta we ecoraze gaya ghee eof ucts sch ae eee = it OF the snfeiest. foxti) 4 ol 2 : ‘oti th cn 5 ‘as Hebtee'wiblawraoney = i ‘ites Be’ ps terest oa the (GH ab ; eee 4 [ee enemy | SEPM j _ : SOR sus ona i loa came eine oy oe : See Cie eo eae : | Se aaa ; Pear remertren meatier A ak 7 “eh DcaRG Bile af Eechange I Crete Holling wa OF EEASAEE es money imediatey, eta povides i he ney by ecaltngsne i of exchange le cepsts te amount the il i te even accune ofthe Diller ater deocting irl of nee for he period of te fon whch ‘Pao of Comin Banks | e 0 ot thin 90 djs. Wheat bl i tchabe irs, he bak bis ig semen fom he banker of he debe who std Ok (9) Cred Cation ote relic ceaon ie one of the most tok. Like other nani insttons, hoy Soants fe Advanees «loan, opens an SET || Ste te see ott ctr ude ae py im ck are ski infos he mooey by chau cortgtohpeed, Bysrantans ne fois J ban amates ces or cron (0 Plnancng Foreign Trade ‘8 comtetial bank finances feign tae ‘orsign bill ofexstange-ané collect ‘nse oier feign eka asians aad fis cosomecs by acceting ‘reign bank, le snd sell frien carey (Si Ageny Services ‘teak eIbte shes of commer bak poise ple of seni ‘stsitemen which hows is ees uals ov apuresar sce a Monetary Boros fom year Th sit se shown on teh hand ian he ibe on be Iefeiand side ofthe Flan her ag inh case. of homgany, teases sd ‘abies ofa tua mis falanes, TS balance shedfch every commescal bank in das equi to pblish onc in yee asl 61 Porm éfBelance ened : Seine ee Kem eared — tee SEE SE eaten teem kc iC pe dtc of titi fs cS ‘Geass ofthe dv hie ove Table Sf ‘He Detibutomarares de i inion Ecaul fei k Clreney ote ying io eee wit and fs fpeconnge of Hef) ibiben whi its el eres Go ot el ioe ote Bask bi a fi depen, Thestond td nde foro ‘Sak ap eter ake "TBE commercial Banks a Jerceatngocf heii et ders epi wt Tis of the bik techie eu wha Zonk Cheaency hen ie emote orcs ‘eal eo ot soe: ets vey ken ‘ies dyes TRE igematasns seal redid puchateg THe ink eis pay ‘Iscowing bil of excenanod weary il f 90 days uration. Some ils Uretchange se aesoped By # commercial Bank of beba f is eusomets Stic ultimately pusiaes. They ae a abiltyB6tey ar neue unde ‘Sete en rn eh fe cena Se anctions of Commercial Banks @ te The th ite, investments by i i Sood ad indus, ysis ed i secures when here ie aed for move ea snd advances is the mos prone soars of nk ste he bank chases Ingres ats Ete higher tno the Sak rt: Th bak makes advnces ae es och cots nd overran eos ote laf epee ‘es To he sevendh tema alae Tiles ofthe bis casomns ehh te bnk hs accepted and endocsed on ter blll. haya i et ie tank becanse dhe labile of customers casi in he estoy of he Dac. Tre tank charges focinl commission 1 all aBesptances apd tadarenees hich some of lnm, The eight slates the value ol pormene ‘ss of te Bink nthe feof progeny. tural, fixtes, te They Ae shown i te bale shet ater owing fe depeiaton eye) Sear. ae ey item acces proms rtined bythe bak aft paying sonpecton ts act rots to shied i the bank. The bank can sell, ih tm lating as ‘The Ditetbution of Lables ‘The lahsies of commercial baile Calis bn i The oe th nema hich orm he Sous of ts fan, OF tentfire call oft ‘ull thar wc contd Wy uel boldest and fw to them. The second in js he ere fund contin of secoelee) ‘erores which af ino meet ontagroicalh Souci ony yee bank is equiredotoepacerain ecestage of Maud siete eco fun. Te resend iss a babi) fo telfharetoldes Tee ticle omits bt the tine and demand deposits, Degas ee ace stick {9s estos. Toes athe main sére ‘tomn hie he bank gos ane lnvesineo and are indectly the eur of is ingame By keccine to, Beene of ts tine nd dead dopo mca back ends emda ‘sncunt ou seri. Borowangs tom ote bags We oer The ee, ‘ily boos secsied ai unsecured loans ttn te cenal tank Seeeee {ote aon tebe of ome tcogaed criey nd ug ean it rescve unds ying wit the ental bak The i den Ui sabe ee ‘he bls whch th Bank pays ou of ts eites, The suk tee nates el for oletion, These are he bills of kchange which he bank calaccoxsatt fi castomer and credit amen th acconts Hesse Rees aang tte bik. The seventh tm js the accepted entrant bla ct ‘exchage bythe tink on Beal oft curtomers, These arse lang ong Sink whi to mest when te ils atin, She eich tm soetngene abies eats to these claims on the bak wih te untassece nee og outstantingfeewanF exchange contacts, clans ometsowledged cote oe the fot item, prof sod los, sf sbown profits able he Soarbolion ‘which are Tidy onthe beak i 0 ‘Be vin ims ofthe tahoe het son Tale 6 6 w gn yg io ee wi femelle Metaince eae Ss pti bak shows fe Natl sone Bf eying the lace seve EE fie safer commercial banks of sony, one Ga as Kotha eof he epee “Te eset lcs a seni ey Sst ahansandiavenens ses btshtes orate pesky SE Seo radar ition Gt a fee ome ate, OE ‘she's mnetay sytem in den eptis espe Maxis of ranspect ie undeveloped nds i oe ‘oti mete ests ecvak otc eaae Rope eee 4 [--—aes nv tv aees ares ele ea I | Wty eat oer ta tries oat eel wat ‘aun of wae ny SR thot we ei {Stet nite prove sh iem eae some coupes ike Gite hey atvince mei em ‘tnd extemal cade. The banks provide fans to reckill i wach ey oa They cho ep eae pila one ae ‘iccpiing bills of exchane, providing overatt Hate ny toes tahtee are Say hetetthange cea gee ction f Cominercit Banty a Se Pe ce zi race cocina incest ey a tanks el he “The small ad mga ‘Te commercial bas 8 couities. Tey peovide tvenginesing- medica sat empbae geal RHEE ‘es eect. yrs soap i om) bee oc is ue Nera arene aa oc | Sareea tia edt adh ren © Tay mln etn Scr Seneca ee vided by a, umber aif i banks is Tie Thus the hanks aoe, only help peel emer ce = top

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