Banking and Financials

There is much benefit from the measurement of bank capital. It is very difficult to measure bank capital. Really, a capable bank must find out this thing continuously. It gives a try picture of a bank. The function of the measurement of bank capital is considered very important. The bank should pay attention to the work that it performs because a bank is a sensitive institution. The financial condition of a bank can be known from the measurement of bank capital. Measurement of the bank capital gives benefits to all parties. For this, it is necessary to know the ownership of the bank capital, borrowed capital, and capital funds. the amount collected from both of these sources is bank capital. In fact, the bank capital should be considered as a measurement of the adequacy of bank capital. It can be known from its own record. For it, first of all, the sources of equity or ownership capital should be found, The following titles are the sources of ownership or equity capital The amount coll...

  Insurance contract can be classified into two types as the following: 1) Contract of Indemnity 2) Life Insurance Contract 1) Contract of Indemnity The contract of indemnity is called the contingent contract because the indemnity depends on the incidents in the future. An incident is uncertain, may or may not happen. If the incident takes place, the indemnity should be given but if the incident does not occur, the indemnity should not be given. An indemnity refers to the economic loss that occurred should not be given. An indemnity refers to the economic loss that occurred to the insured to be fulfilled by the insurance company. The objective of indemnity is to restore the property of the insured to the condition before the incident. Indemnity is provided only up to any fixed amount if the subject matter of insurance is suffering damage within the insurance period because the insurer makes insurance by taking the premium from the insured. The contract of indemnity has its own type...

A bank collects capital. The capital a bank collects has different sources. The sources from which capital is collected ie. by issuing shares or by taking loans are the fundamental or main sources of bank capital. In other words, the capital can be classified into the equity capital of the bank and the borrowed capital of the bank. The capital collected by issuing the bank's shares is called share capital. The capital received from the shares, which are invested in the company by the shareholders, is legally considered the property of the bank (itself). The amount received in this way is not considered a loan of the bank. The bank does not have an obligation to return such an amount to the shareholders. the bank need not return the collected amount from the shareholders in any form until the bank is dissolved. There are two types of shares; preference shares and equity or ordinary shares. Preference shares too are of four types; cumulative preference shares, Non-cumulative preferen...

A bank has to set some criteria for providing loans. Persons who come to a bank to demand a loan, the bank should not provide loans of random choice, not by examining and investigating. If a loan is provided without proper investigation it will lose the principal and interest. Therefore, the bank always has to follow some criteria for providing loans. These are as follows: 1. Personal Character Before providing a loan, a bank should make an inquiry and examination of a person who comes to the bank with the proposal of a loan. Though it is very difficult to find out the true character of a person, it must be checked out. The bank should study whether the person has good character with the intention to pay the loan or not, whether he is a person of criminal nature or not, whether a creditor has filed a petition against him in the court for recovery of debt, or not. If the person is doubtful in nature, character, and the bank uneasiness to trust him if so, it should not accept the loan pr...

The nature and the structure of the financial institutions may be different in each institution, because the financial institutions may be of various types. The management aspects of these institutions may be different according to the provision of law. Therefore, the structure of the management of the financial institution is described hereinbelow: 1. General Meeting Any financial institution has a general meeting. The general meeting is the most powerful body of a financial institution. Hence, the general meeting is the supreme body of any financial institution. It determines policies, increases or decreases capital, removes and ads the objective of the institution. Including the election of directors, only this body has the right to do so. Such right is not provided to any authority of this institution. The board of directors should discharge the function within the power delegated by the general meeting. 2. Board of  Directors There is a board of directors in each financial ins...

Certainly, many lines of equality and inequality are drawn between the commercial banks and the financial institutions in many things, because the development of concepts of both of them has become separated. Yet, both of these institutions have become unavoidable for development. Theoretically, the commercial bank is the builder of the loan. But the financial institution is only the broker of the loan. However, the equality and inequalities between these two institutions are described as follows: Similarities between Commercial Bank and Financial Institutions Both of these two institutions are inspired by the objective of gaining profit. Both of these institutions are financial mediators. And both of them do business with different types of financial means. Both of these institutions buy the primary securities and issue the secondary securities, sell them to the last creditors. Both of these institutions establish or make a good relationship between the savers and the investors. Apart...