A Guide to Commercial Banking Services


Commercial Banking offers chances in areas from cash management to global liquidity and relationship management and trade finance. Commercial banks make their money from varied schemes such as credit interest rates, investment, and the usage of their own banking fees and for cards that they charge their clients.

A commercial bank is a kind of financial institution that offers services such as making business loans, accepting deposits, and providing basic investment products. All banks that work for a profit are commercial banks. Commercial banks need to keep certain percentage of their deposits as per the law. This proportion kept with them is known as Liquidity ratio or Cash reserve or Cash ratio. This is done in order to protect the deposit of the customers and to prevent crisis of the bank. There are other methods as well by which commercial banks make credit, for example by government policies, the death of a customer, by the sale of treasury bills and receipts, and also by selling shares to entire public and the customers.

Both commercial and retail banks are of vital importance to the global and domestic economies. Retail banking brings in the customer payments that mainly allow banks to make loans to their business and retail customers. Commercial banks make the loans that allow businesses to develop and employ people, contributing to growth of the economy. Bob Stefanowski , a well-known financial expert says that both commercial and retail banks are vital for the smooth functioning of an economy. Maximum large banks have dedicated divisions that manage corporate banking as well as retail banking; both businesses are amongst the major profit centers for maximum banks.

Commercial banking is sometimes referred to as wholesale banking which serves business clients that are over the verge allocated to the branch network, but not yet necessitating high end corporate banking services. The key difference between corporate and commercial banking would be proportion and intricacy of the organization. Commercial banking is also usually referred to as business banking, and deals with attorneys, small business customers, accountants, etc. While on the other hand, corporate banking deals only with big companies, the ones that are known by their names only.

Another unique thing about commercial banking is that while approving a loan to a client, they do not offer cash to the debtor. As an alternative, they get a deposit account opened from which the debtor can take out money. In other words, while approving a loan, they create deposits automatically.

Bob Stefanowski also known as Robert has more than two decades of experience in commercial banking as well as private banking and retail banking. He also understands private equity quite well. At present, he is working as the CEO of DFC Global, A Lone Star Company. Prior to this, he has been associated with some of well-known organizations such as UBS Investment Bank, 3i Group in the U.K., GE Corporate Finance Europe and PricewaterhouseCoopers.

In 2009, the Prime Minister has appointed Mr. Stefanowski as a Representative of the Victoria and Albert Museum.

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