Before you learn about what types of banking operations exist, you need to understand some of the most important definitions. For example, what is the institution in question itself? In modern economic terminology, the bank acts as a financial and credit unit, performing all kinds of operations with both money and securities. In addition, he is authorized to provide all kinds of services to various individuals and legal entities, as well as, of course, to the government. You can imagine this structure as a commercial organization created to attract profit, performing certain banking operations and endowed with exclusive rights to attract funds from third parties with their subsequent placement on their own behalf.
Main classification
In the modern world, almost every concept has a certain typology. So, we can highlight some basic banking operations. There are only three of them:
- attraction of foreign currency deposits;
- credit operations;
- Attraction of new clients.
Let's consider each in more detail. So, the first type is aimed at attracting funds when fulfilling the conditions accepted for execution immediately after the conclusion of an agreement between organizations. In turn, credit operations are distinguished by the fact that previously involved funds are distributed by the bank on its behalf and replenished in accordance with the agreement, which indicates the terms and conditions of the return. The third type is especially important, because, like any other organization, the financial structure under consideration needs continuous development. Maintaining existing relations and constantly attracting new customers should be ensured by creating favorable and favorable conditions for cooperation.
Additional varieties
Among other things, all banking operations and transactions can be divided into active and passive. The first traditionally include loans. This is the main activity in which the above structure receives income. Bank loan products usually bring profit at the expense of interest that customers pay monthly for the services provided. However, it is important to remember that the interest rate accrued on active transactions must exceed the size of passive transactions. All other services provided by the banking structure can be safely classified as settlement, which, in turn, are also divided into several main types.
So, settlement operations include the following varieties: investment and cash activities, as well as savings and deposits. It should also be noted that the latter occupy a particularly important role in the field of banking services. This is the main form of passive operations. The main goal of any deposits is to gradually increase the funds available by the bank. Settlement operations of this type apply to the accounts of not only large state institutions, but also relatively small private organizations, as well as individual individuals who have expressed a desire to entrust their savings to a bank.
Banking operations: development
Over time, the activities of the structures in question were constantly and continuously complicated and universalized, after which the services provided became more and more diverse. The types of banking operations expanded, the organization of labor changed. The emergence of new types of activities was determined by the achievement of a significant amount of profit, accompanied by minimized risks. The described actions have a beneficial effect on the further formation of off-balance sheet transactions, which cannot be unequivocally attributed to either passive or active income. Consequently, the presented types of banking operations are not recorded in the balance sheet, and the commission received from them is not subject to taxation.
Off-balance sheet activities have been known for a long time, but recently they have been especially in demand. Two of its varieties are actively gaining popularity: exchange and financial services. These traditionally include stock management, advisory activity, and planning of both tax and budget functions. You should also pay attention to the so-called guarantee business. It also refers to the number of off-balance sheet transactions. A distinctive feature is that the bank in this case acts not only as an intermediary, but also as a direct participant in any transaction. The above services have a huge impact on the overall development of the financial activities of the structure in question, because they allow you to expand the scope of application.
Securities
This term implies a document that certifies the property rights associated with it, and also has the ability to independently circulate in the market and can act as a full-fledged object of any transactions (for example, sale and purchase). It is important to remember that securities are sources of one-time or standing income and can be classified as a form of cash capital. Consequently, acts of transfer of such documents are committed after entry in a special register. In addition, a change of ownership means the transfer of all rights indicated in them.
Securities are often used to organize the activities and successful functioning of various commercial entities. Distinguish between credit (bills, bonds) and means of payment (checks). All of these documents are designed to provide a simple and quick transfer of rights to both material and any other benefits. Thus, all operations of banks with securities are divided into two main categories:
- issuing own documents of this kind;
- actions with customer materials.
After obtaining a special license, the above structures are entitled to trust the issued documentation in accordance with the concluded agreement more often with legal entities, but sometimes with individuals. In addition, it becomes possible to carry out the following operations of banks with securities: issue, sale, purchase, storage and accounting of the above materials, which are used as payment documents. This helps to attract money to accounts and deposits.
Various credit organizations have the ability to carry out the following types of financial activities: dealer, brokerage, depository, as well as securities management, maintaining a register of their owners and, of course, determining mutual obligations between cooperating parties. Consider each of the above types of operations in more detail. So, the first category involves the execution by a commercial bank of transactions such as sale at its own expense and on its own behalf. A characteristic feature is the fact that only a legal entity can act as a dealer. The second category of activity is determined by transactions in which the commercial bank is only an agent or agent, and all its actions are subject to the relevant agreement. In turn, depository activity is expressed in the commission of services consisting in the storage of certificates and accounting of rights. Again, this feature is available only to legal entities. In addition, it is important to note that the conclusion of the so-called depository agreement is not the basis for the transfer of property rights.
All operations of commercial banks with bills relating to the category of management are aimed at making trust management of securities. Moreover, actions should be performed on behalf of this structure for the previously agreed remuneration during the entire term of the contract in the interests of the person who has concluded such an agreement with the bank. It should be noted that not only the securities themselves are subject to transfer to ownership, but also the funds that will subsequently be invested in them, as well as materials obtained as a result of management. Finally, we note that the clearing activity determines the mutual obligations of the parties. This may be the collection, adjustment and verification of information regarding transactions involving securities and the subsequent preparation of various accounting documents.
Direct work with clients
Settlement and cash services is another major function of banking institutions, which involves working with both individuals and legal entities. Its main task is to present a whole range of services to the clients who have addressed. It may include both storage and movement, as well as registration of financial assets. Thus, cash management services can be divided into several main categories: non-cash, cash and foreign exchange transactions, as well as acquiring. For effective financial management, banking structures provide developed service packages. From them you can choose the one that most fully meets the requirements and expectations of the client.
Cashless transactions
The above calculations are traditionally distinguished by the effective execution of all instructions, systematic notification of the receipt or expenditure of available funds, preparation and provision of both intermediate and final results for all ongoing processes. Control over the procedure for conducting cash transactions of this kind is carried out by both the bank and the client who has contacted him. The transfer of correspondence and instructions between the two designated parties occurs in two ways. The first - classic - involves the delivery of paper documentation in person or through proxies. The second option is actively gaining popularity over the past few years. This is Internet banking. This management method allows you to remotely operate with financial means. The presented system is already used in many organizations, since all orders and requirements can be sent via the Internet, which allows you to quickly and efficiently follow orders.
Currency operations
Each company has its own bank account . Such accounts are rarely used to obtain a passive type of income, since the main goal is to provide quick and reliable access to credited funds through various channels for transferring orders. A bank account can be maintained both in rubles and in foreign currency. The latter option is actively used if the organization operates with the use of foreign banknotes. In such situations, you will need to open three accounts: current, transit and accounting. The first is necessary to directly manage the available currency, the second keeps records of incoming cash, and the third is used to record the purchased currency in the domestic market. Transactions in a bank account in foreign currency provide their owner with a whole range of services: acquisition and subsequent sale of bank notes at the request of the client; conversion activity; sale of foreign exchange earnings; transfer of funds in accordance with the concluded export-import transactions of the owner.
Acquiring
Behind this interesting term lies a widely used function - making payments by credit card when paying for various goods and services at retail outlets. Such actions become available only after the conclusion of a separate contract. The organization that is responsible for the provision of the above services is called the acquirer. Among the responsibilities include the provision and installation of appropriate equipment in retail outlets, as well as their subsequent maintenance and, of course, the timely conduct of all activities related to the use of plastic cards. It should be noted that similar opportunities are provided for accepting payments via the Internet. In such cases, the terminals for reading cards are replaced with special programs, the forms of which are filled out by the buyer. Such a service is called Internet acquiring.
Cash
Like all the above types of banking operations, this category implies actions with the finances of the client who applied. After concluding an agreement on settlement and cash services for the organization, it is possible to draw up a checkbook. It is necessary to receive cash, which subsequently can be used to finance the business of the company, pay for suppliers' goods, as well as to pay employees. In the modern world, a corporate bank card is an excellent alternative to the well-known checkbook. In parallel with its execution, a procedure for opening a specialized account takes place, according to which a credit institution will be able to keep a record of all actions performed with it.
Registration of each transaction with a credit card allows you to receive a statement with all the turns at any time and calculate the remaining cash. In addition, using the service described above, it is possible to make calculations to cover costs in two categories: household expenses and overhead costs, as well as costs directly related to the main activity. Among the first traditionally include the purchase of office equipment and stationery, the necessary software and training materials. This category is also attributed to payment for services of various related services (for example, postal or courier). In turn, the second type of expenses that can be paid using a corporate bank card includes payments to suppliers, representation and travel expenses (consisting of booking and buying tickets, paying for hotel rooms and meals for employees, renting a car).
In addition, this category also includes settlements with counterparties whose services are directly related to the main line of business. It should be remembered that all expenses presented for payment by a corporate bank card should be attributed to tax accounting only if they are regulated and confirmed by relevant documentation in accordance with the current Tax Code. Thus, the above function provides the legal entity with many useful features and is a way to solve a wide range of tasks. We list some of them:
- simplification of the procedure for settlements in foreign currency;
- improving the safety and reliability of the ongoing processes (this minimizes the likelihood of loss or theft of money, and if the card itself is lost, it can easily be blocked);
- significant time savings (there is no need to queue at the bank cash desks);
- the possibility of round-the-clock access to finance (for example, to increase or decrease the existing limit);
- providing simple and quick control over reporting means (connecting the SMS-informing option, as well as making statements about extracts with detailed expenses);
- providing management variability depending on the model being adopted (dividing employee cards into groups or linking all to one account with a common limit);
- expanding opportunities (making more payments, one-time payments for amounts significantly exceeding the amounts available for calculation with cash money, as well as making purchases via the Internet).
Finally
Based on the foregoing, we can conclude that banking operations are aimed at close interaction of a financial organization with a client who has contacted and includes a wide range of various services. However, two varieties can be considered the most basic directions. This is a credit and settlement and cash services. This includes various operations on a bank account, receiving payment documents, issuing checkbooks, issuing the required information and statements regarding the status of the client’s current account, operations with plastic cards and much more.