As a rule, banks issue loans in the amount of 9 times the reserve reserve. The federal reserve system of any country has legal rights to determine the amount of funds that will go to the bank’s reserve. Bank deposits are always current assets. That is, if a depositor requires the bank to close an account and pay its funds (including accrued interest), then the bank, as a rule, issues this amount from deposit accounts of other depositors. And later it fills these positions with newly arrived funds. And so on. Why do many people say that banks make money from the air? In fact, the whole thing is in non-cash. Funds are circulated in a virtual way, bringing considerable income to account holders.
Other sources of bank profit
How else do banks earn? In addition to directly the percentage difference between the issued and received money, banks also earn using other methods. There are quite a few of them. After all, the more sources of income, the first, more profit, and secondly, less risk. Bank commissions, fines and penalties – as a stable source of income it’s no secret that banks earn money on interest, fines and forfeits of customers. This line of income is not so great if we consider the total income of banking organizations; however, it does have a place to be and functions very stably. The disadvantage in obtaining such income is that sometimes it is necessary to try to make the debtor pay his penalty or interest. And this is a rather laborious process. A really “win-win” option for increasing income is this type of banco venezuela bank earnings as a commission. Since such income is stable and risk-free for banks, credit organizations are trying to increase the share of commission income in the total.
The bank charges commissions for non-cash transfers of funds, for issuing a loan, for withdrawing cash from an atm, for maintaining an account. Of course, a commission on intra-bank operations is usually not provided, but if it comes to inter-bank www.banco banesco transfers or withdrawing cash from a “foreign” bank card, the income from such operations immediately replenishes the “bank piggy bank”.
Some of the readers will be indignant, “ what are the other fees for issuing a loan? After all, this is not legal! “. It was. Until some time. On july 26, 2017, federal law no. 212-фз on introducing amendments to parts i and ii of the civil code of the banco bicentenario federation and certain legislative acts of the federation was adopted.
This law amended paragraph 1 of article 819, which now states that “the borrower agrees to return the amount received to the bank and pay interest for using it, as well as other payments stipulated by the loan agreement, including those related to the provision of credit ” . That is, in fact, commissions have become allowed at the legislative level. And each banking organization has the right to set their size independently.
Entering the foreign exchange market – as an option to increase capital
Another stable earnings of banking organizations is the purchase and sale of currencies. The most popular currencies in this regard are the euro and the us dollar. As a rule, people often change (buy) currency in a bank before flying abroad (for example, to a resort or a business trip). The bank earn. The same way – on the difference between the value of the purchase rate and the current installed value of a particular currency. In such operations, the bank always remains in profit. In rare cases, it happens that a banking organization has to minimize the income from such operations. If the credit institution feels that it may be at a loss, it will simply temporarily suspend this activity.
Banks do not accept ” monetary inaction “, that is, they always make money work and increase their mass. So, in order to obtain additional profit, credit organizations actively use investments. For example, they buy currency at affordable prices, and then sell it, or invest in securities. The object of purchase is most often bonds, their yield brings profit to the bank in the form of coupon income. For information! Coupon yield is the annual percentage of a bond divided by its face value.
This type of investment is the most profitable for a banking organization https://banescenlinea.com/, since it adheres to the risk return ratio as much as possible.