The banking system in the modern economy should ideally act as a battery and a distributor of free money. Of course, in harsh reality, everything is not so good, but nevertheless, we will study deposit operations as one of the most important parts of this process. In the article we will pay attention to all aspects. And for this we consider the deposit operations of the Bank of Russia, as well as various commercial financial institutions.
Terminology
What are deposit operations? This is the name for the active actions of banks to attract funds of individuals and legal entities in deposits for a certain period (or on demand).
The objects in this case are deposits. This is the name of the amount of funds that entities deposit into their bank account. There are no problems with this. But who can act as actors? They mean individuals, as well as enterprises of any legal form of ownership.
Conducting deposit operations: preparation
Initially, each credit organization has the task of creating its own policy in this area. Under it, it is necessary to understand the totality of certain measures of the commercial structure, which are aimed at creating, planning and regulating banking resources.
The ultimate goal of working out with the subsequent implementation of the deposit policy is to increase the volume of the working resource base. At the same time, it is necessary to strive to minimize costs and maintain the necessary level of liquidity, taking into account all types of risks.
Given that each bank is developing its deposit policy, the main question will not be whether it exists, but about its quality. The organization itself depends on a large number of factors, including the size of the financial institution, and the qualifications of the employees who are responsible for the execution of transactions, and much more. After all, the bank’s deposit operations are carried out with significant amounts, and to allow them to disappear means to put a stain on your reputation.
Varieties of deposit operations
The types of deposit operations depend on many factors. So, based on the category of investors, then there are deposits of legal entities (enterprises, organizations, other financial institutions) and individuals. And in the form of withdrawal, the following deposits are distinguished:
- Poste restante. This means that the client can come at any time and demand his deposit.
- Urgent. These are valid for a fixed period. If the client wants to withdraw funds before the contract expires, he may lose a substantial part of the interest (or even all of them).
- Conditional. These funds can be withdrawn only upon the occurrence of certain pre-agreed conditions. An example of this is the onset of the 18th birthday.
These are the bank's deposit operations. But they can share, acquire a more detailed look. We’ll talk about him now.
Demand deposits
These include:
- Funds held in settlement, budget and current accounts of non-state enterprises that are in state ownership.
- Money owned by individuals.
- Funds placed on the accounts of funds for any purpose.
- Deposits of the population on demand.
- Means of correspondent accounts of other banks.
- Cash deposits on demand with financial authorities, non / commercial organizations.
- Funds in settlements (they are understood as letters of credit and checks), as well as obligations for certain transactions.
Despite the fact that there is a high mobility of money on these deposits, a minimum balance can be determined that will not be used until emergencies, in which case to obtain a stable credit resource. This, by the way, carries a hidden potential. As such, we can name credit and deposit operations with an account. They allow you to conveniently and quickly gain access to the necessary financial resources, while there is no need to obtain a loan from the bank.
Time deposits
A well-defined storage time is very important in order to maintain the liquidity balance of commercial banks. Their portfolio also allows us to talk about the sustainability of the organization. As a rule, time deposits are accepted for a certain period:
- up to 30 days;
- 31-90 days;
- 91-180 days;
- from 181 days to a year;
- from 1 year to 3 years;
- more than 3 years.
Very often situations arise when individual term deposits are not in demand, then they become such that they have expired. The return of their money in this case will be very problematic.
The popularization of this type of deposits was positively affected by the wide distribution of plastic cards and settlements with their help. In such cases, special accounts are created for which a reduced interest rate is charged, but in case of withdrawal at any time, the client does not receive fines from the bank. To increase people's interest, the mechanism of complex rates is gaining widespread use.
We increase the amount of resources
For this, a variety of deposit banking operations are used, which are aimed at different segments of the population depending on their social level, as well as the amounts and terms for which the deposit is opened and transferred.
At the same time, banks also take into account the requirements of various categories of people who can open an account. So, systems of interaction with everyone are envisaged - from students and pensioners to the middle class and businessmen. To make sure of this, just look at what these financial institutions offer.
There are different contributions: student, pension, investment, and so on. According to them, banks offer increased interest or other preferential terms. Important in this case is the simplicity and speed of concluding an agreement and opening an account. Most of them use pre-prepared forms. Although in some cases an individual contract may also be drawn up (this directly depends on the category of client).
The fight between banks for customers
Competition between various financial institutions forces them to analyze deposit operations in order to choose a form of interaction with people that would put them in a favorable light. This consists in providing a full range of services, and in improving the quality of service, and in the ability to monitor your account remotely.
Various bonuses can be provided in the form of selling traveller's checks, converting currencies at a favorable rate, issuing plastic cards, speeding up money transfers, paying for various goods, utility bills and much more. The creation and development of a wide range of banking services along with deposit insurance improves the attractiveness of a financial institution in the eyes of current and potential investors. Due to this, the resource base of the structure is rapidly expanding.
Savings and certificates of deposit
They are a type of term deposits. They were first allowed at the legislative level in the Russian Federation in 1992. The rules applicable to certificates are the same for all banks. Although the terms of issue and circulation of each individual type are developed precisely by financial institutions.
Certificates can only be issued in rubles. In addition, a significant limitation is that they cannot serve as payment or settlement means for services rendered or goods sold. A peculiarity is that the certificate rate cannot be changed unilaterally in time. If the client has requested payment after the specified period, the financial institution is obligated to him to pay the indicated amounts upon request.
The organization of deposit operations, which was discussed above, is more related to one bank and its interaction with individuals (or enterprises that are not related to the credit sector). Now let's expand the scope of our acquaintance.
Bond issue
Bonds are used as additional income. They are regulated by the same documents as stocks. The Bank may issue bonds:
They can be secured by pledge or without it, with interest, discount, convertible, with different maturities. In order to attract funds, they can be issued in currency or rubles.
It should be noted that the provision of resources by banks to other financial institutions is of particular importance (when it comes to accounting for deposit operations). This is done through auctions and exchanges, although it is also possible to establish direct contractual relations between organizations. But if not very large structures operate or there is no trust between them, then an auction or exchange is a more likely option. By the way, the presence of intermediaries and the need to go through at least some sort of selection play a significant role.
Now let's pay attention to our realities and talk about the deposit operations of the Bank of Russia.
Loans from the Central Bank of the Russian Federation
The bulk of the Central Bank's money until 1995 was provided in order to lend to priority sectors of the economy. In this case, it was logical. Such were considered separate groups of the industrial direction, agriculture and other areas that are of significant importance for the functioning of the state.
Since 1994, the Central Bank began to practice resource auctions. Already in 1995, they became the predominant refinancing tool. Since then, although targeted lending is not something fantastic and out of the ordinary, the Central Bank is mainly used as a tool to finance private banks at a lower rate, so that they can support the broad masses of entrepreneurs and ordinary citizens whose demand can significantly help the domestic economy.
The work of commercial banks
Let's look at what may be the deposit operations of Sberbank when interacting with other financial institutions. There are 4 main areas:
- Interbank loans received from other financial institutions. They are accompanied by an agreement, which stipulates everything necessary for such transactions: amount, term, interest rates. Using this resource is very expensive, so it is not particularly actively used.
- Conducting a deposit operation by replenishing a correspondent account. It consists in the fact that the transfer of money is based on the relevant agreement. Moreover, interest for the use of resources is not paid. An account balance is provided as a reward. This method is usually used by friendly or trusting banks.
- Resources from other affiliates. This method is valid only within one bank. Its use is convenient because there is no need for collateral, registration and exchange of agreements before obtaining a loan. No, of course, certain documents will have to be prepared, but this is after the deal. The operation is carried out as needed. To carry out it, it is enough to make a phone call, and a notification sent by e-mail or fax serves as confirmation. Thanks to this, this tool is considered the most mobile and convenient. It allows you to attract the necessary amounts, while at the same time costing minimal.
- Help from the main bank. This type of attracting resources could be attributed to the first paragraph, if it were not for the fact that the interest rate is usually a little lower and is set by directive.
How is this done in the world
We attract funds in deposit form with us at significant interest rates. Loans are also issued at an even higher percentage. Is it the same everywhere, or are there exceptions?
The fact is that deposits are popularized as a reliable means of protection against inflation. Of course, it is worth saying that this is true only in certain cases - often they simply reduce the impact of negative effects. Therefore, rates directly depend on this indicator. So, for example, in Japan, USA, Denmark, Switzerland, you can observe deposits at 0-0.5% per annum.
Loans in these countries are issued at 1-3%. On the one hand, it is not profitable to place funds with them. But let's look at our financial institutions - here you can see rates on deposits in dollars and euros at 5, 6, 7 and even 10%! Theoretically, we can conclude that it is much more profitable to make deposits in foreign currency on the territory of the Russian Federation. But here there are a number of risks, including the possibility of forcibly converting all deposits into rubles, the disappearance of a bank from the financial services market, and much more. Therefore, high interest rates are a kind of compensation for the corresponding risks that the currency owner bears.
Summarizing
So, deposit operations of banks are certain actions by which the formation of banking resources takes place. This process is carried out through the use of a number of tools.
So, the primary source of obtaining resources is to attract funds from customers (which are individuals and legal entities). Without carrying out operations of this type, it will be impossible to form the initial deposit portfolio of the bank, and the financial institution will not have the resources to issue loans and conduct its activities. Thus, without this, the modern monetary system would experience significant problems.