An integral part of the modern economy is the banking system. Its role in the development of market relations is enormous, since with the help of financial structures there is an accumulation and redistribution of cash flows of state entities, which ultimately leads to the development and growth of the national economy. The banking system is a united community of credit organizations.
What is a credit organization?
A financial structure that has the status of an economic entity and has the goal of making a profit from the main activity defines the concept of a credit organization. In most cases, such institutions are legal entities whose occupation is strictly regulated by the current legislation of the state. Financial organizations must undergo accreditation and obtain a license to conduct their activities. In other words, the concept of a credit organization is the following - a legal entity created with the aim of making a profit, which is accumulated from operations and transactions with business entities, legalized and regulated by the highest authority - the Central Bank of the Russian Federation.
Types of Credit Institutions
In our country, the banking system has a structure consisting of two levels. The first step is the Central Bank of Russia. This institution has a dominant position, as it is the main regulatory body of the entire financial holding company. The Central Bank does not carry out operations related to the provision of services to the population, but is engaged in monetary regulation of the country's budget, the issue of funds, and coordination of the activities of structural units.
The second level of the system is occupied by credit organizations, the concept of which is more extensive, in contrast to the first echelon of power. Credit institutions are divided into two types:
- banks - their functions include the full range of financial services to business entities and the population of the country in accordance with the license list;
- non-bank credit companies - carry out a narrow type of operations, also regulated by a license.
In turn, banks are divided into universal, specialized and institutions with state support.
Non-banking structures include settlement, deposit-credit companies and organizations associated with the collection of values.
Banking institutions
The concepts of a credit institution and a bank are identical, since the bank is one of the varieties of the financial structure. What signs does this institution have? What types of transactions does the bank have the right to make?
The concept and characteristics of a credit institution that determine the conduct of banking activities:
- a bank can only be a legal entity established in accordance with legislative requirements and rules;
- this institution must undergo accreditation and obtain a license to conduct banking operations, the type of which is indicated in the corresponding list;
- a banking organization does not have the authority to carry out trade, production, insurance and other similar activities.
As mentioned above, banks specialize in providing financial services to all economic entities of the country, including the population. The main types of such transactions include:
- opening, maintaining current accounts of both legal entities and individuals;
- attracting cash flows of the above entities in deposits and deposits;
- placement of attracted assets on behalf of the institution and at its expense;
- Settlement and cash operations, collection of values;
- currency, factoring, leasing operations, transactions with securities and precious metals;
- issuance of bank guarantees.
Non-bank credit structures, types and differences
The concept of a non-bank credit organization is defined as a financial institution that has the right to carry out only a narrow range of banking transactions and operations in accordance with the established regulations and the current license. The main difference is that such companies have the authority to work only with legal entities and provide the following services:
- attraction, as well as placement of financial flows of legal entities;
- implementation of internal and external settlements on behalf of;
- operations with foreign currency are allowed only by bank transfer;
- issuance of bank guarantees;
- collection of cash and other valuables;
- the provision of advisory services.
The concept and types of non-bank credit organizations are as follows:
- Settlement structures are engaged in opening and maintaining current accounts of legal entities, making settlements on their instructions, and placing finances in government securities;
- deposit-credit companies carry out operations related to the attraction, as well as the placement of financial assets of legal entities, the issuance of bank guarantees, foreign exchange transactions in cashless form;
- collection organizations are engaged only in the collection of cash flows, securities, settlement and payment documents.
Goals, functions of credit institutions
The main goal of creating a financial structure, as well as the majority of the country's economic entities, is to profit from activities. To achieve the final result, credit organizations perform the following functions:
- the movement of cash flows of legal entities and the country's population through the provision of settlement and payment services;
- creation of favorable conditions for the savings, accumulation and augmentation of the population’s money by attracting finance in deposits and deposits;
- meeting the needs of legal entities and individuals in cash resources by providing loans and borrowings.
Conclusion
In conclusion, we summarize all of the above. In general, the concept of credit organizations lies in the fact that their activities are aimed at the implementation of functions that ultimately lead to the development and growth of economic relations at home and abroad, to increase the welfare of the population.