The table shows (a) that banking institutions improve the majority of their funds by attempting to sell deposits—their dominant obligation, and (b) which they hold their assets mainly by means of (i) loans and improvements and bills reduced and bought, together constituting bank credit, (ii) investment, and (iii) cash.
A brief description associated with the primary components of liabilities and assets is offered below:
Liabilities of Banking institutions:
1. Capital and Reserves:
Together they constitute owned funds of banking institutions. Capital represents capital that is paid-up i.e., the quantity of share money really added by owners (investors) banks. Reserves are retained profits or undistributed earnings of banking institutions accumulated over their working everyday lives. Regulations requires that such reserves are accumulated and that only a few the profits that are earned distributed on the list of investors. Continue reading Liabilities and Assets of Scheduled Commercial Banks (principal Things)