This article describes the evolution of modern day banking. The emergence of central banks and fractional reserve system of banking has also been described in this article.
Articles on Banking
This article provides the history behind central banking in the United States. It also explains why the two central banks established earlier failed and why the Federal Reserve has succeeded.
This article described the core functions of a central bank. It lists down some of the most important functions that help the central bank maintain decorum and stability in the economy.
This article describes the various mechanisms using which the central bank regulates the commercial banks. It also explains why such regulation is required for the banking system to function efficiently.
This article explains the rationale behind reserve requirements. It also explains how the purpose behind reserve requirements has undergone a massive change after the introduction of central banking.
This article explains the concepts of interbank lending markets and repurchase agreements. It also explains why these mechanisms are essential to maintain stability in the banking system.
In this article, the various products offered by banks to commercial corporations have been listed. The list includes both interest based as well as fee based products.
This article provides information about what is credit reporting. It also provides information regarding how credit scores are calculated and what is not included in these scores.
This article provides information about how technology has changed the channels through which banking service is delivered. It explains how human labor is being replaced by automated systems and machines.
This article provides the rationale behind the usage of the supposedly expensive credit cards by merchants. It also explains the roles of the different parties that are involved in a credit card transaction.
This article provides information about the various sources from which banks generate non interest income. It also explains why such income is important and how the composition of such income has changed over the years.
This article explains why credit cards are vulnerable if the traditional magnetic stripe technology is used. It also provides information about why microchip based technologies are a better and safer alternative.
This article lists down the risks that are faced by banking institutions. It discusses the business processes that give rise to such risks and the measures that are usually taken by banks to mitigate them. It also explains why some of these risks cannot be avoided despite the banks best intentions.
This article lists down the various types of demand deposit products that are offered by banks. It also explains about the interest rates being offered by such products as well as the regulations that apply to them.
This article provides information about certificates of deposits (CDs) as an investing tool. They also provide information about the various types of CD’s that are available in the market and the unique benefits that they offer.
This article explains how the modern fractional reserve banking system creates money. It also explains the concept of money multiplier and how it limits the amount of money that can be created.
This article explains why capital adequacy ratio is important to the banking industry. It also explains the basic logic behind using capital adequacy ratios.
This article explains the concept of shadow banking. It also explains how it differs from mainstream banking and explains its pros as well as cons.
This article explains the concept of internet only banks. It also lists down some of the advantages and disadvantages of transacting with such a bank.
This article explains the concept of peer to peer lending. It also explains how these companies have proliferated the marketplace and how they are different from traditional banking. Compliance issues are also discussed in this article.
This article explains how banks rigged the LIBOR and benefited from it. It also lists down the changes that have been made to the LIBOR system prevent such an occurrence in the future.
This article explains the functioning of a cashless society. It explains the premise of crime free society which is touted as the primary reason for this transition. An analysis of the pros and cons of the system have also been included in the article.
This article explains the concept of cashless economy. It explains what the pros and cons of implementing a cashless economy in a country like India are.
This article explains the possibility that there may be sinister motives behind the introduction of a cashless society. It also explains the possible harm that this cashless society can do and how it can be hijacked given the dismal macroeconomic scenario.
This article lists down the various measures taken by different governments. It tries to guess the hidden agendas that make cash the enemy of every government in the world.
This article explains the concept of Asset Reconstruction Companies. It also explains the legal and regulatory guidelines that govern the business practices of these companies.
This article provides information about the state of the art lockbox service that is provided by the banks in the United States. Under this service, the bank manages accounts receivables on behalf of the customer. This article also lists down the advantages of using the lockbox system.
This article explains the treasury functions at banks. It explains the importance of such functions and also lists the various tasks that need to be performed at the treasury department.
This article explains the concept of hire purchase. It also describes the situation in which this arrangement can be used and how hire purchase is different from an amortizing loan.
This article provides information about predatory lending practices in the United States. It also explains how these businesses evade the law and that consumer education is the only alternative.
This article explains how China is making predatory loans in the South Asian region. It explores the possible motives behind these loans and lists down the cases of Sri Lanka and Pakistan.
This article explains what Fintech is. It also explains how this sector was created. Some of the biggest investors in Fintech have been mentioned in this article. The article also lists down reasons why Fintech companies have got the traditional banking sector worried.
Technology has revolutionized the way in which the BFSI or Banking, Financial Services, Insurance sector operates. Right from the economies of scale to the synergies, there is no aspect of the BFSI value chain that technology has not transformed. Also, technology offers clients superior customer service. Further, it has enabled round the clock and real-time trading which when used responsibly can be a force for good. Thus, the BFSI firms ought to continue technological progress along with using such technologies with care and caution.
This article explains the scam that happened at Punjab National Bank. It explains what letters of undertaking are and how they were used to defraud the bank. It also lists the governance lapses that allowed such a huge sum of money to be siphoned without the bank knowing about it.
This article discusses the issue of bank privatization. It also lists down some of the pros and cons associated with privatization.
The Indian Banking and Financial Services Industry or the BFSI Sector has come a long way from the time of independence to the Nationalization phase in the 1970s and the liberalization of the economy in the 1990s to the present when it plays a prominent role in the economy of the country. This case analyses the evolution of the Indian BFSI sector along with a Strategic Analysis of the same with the PESTLE and SWOT tools.
With so many news reports appearing about the bad debts problems of the Indian banks, this article explains the various measures and the root causes of the problem as well as presents facts to let the readers make informed decisions. We argue here that it is no longer an if but a when as far as the next banking crisis is concerned, and hence, we suggest the readers to take precautions accordingly.
This article explains how interest rates affect small businesses. It also explains how small businesses should be careful about the viability of their projects when taking on debt.
This article explains the perils facing European banking in general and Deutsche Bank in particular. It lists the reasons behind the poor performance of Deutsche Bank and also explains why it will be difficult for the German government to bail out Deutsche Bank.
This article explains why the fiat system is inherently fragile. It also explains how the policies that are being undertaken by the government are causing rapid inflation. Lastly, it explains why this high inflation is being sustained for so many years and why it will eventually lead to the total collapse of the monetary system.
We all know Investment Banking is Glamorous and yet, demanding. However, what is it that makes it so alluring to management students and professionals. Moreover, what exactly is investment banking and what do investment bankers do. These are some of the questions that would be answered in this article. Drawing from personal experience and conversations with industry professionals, this article demystifies the mysterious world of investment banking.
This article explains the concept of inter-creditor pacts. It lists the common features of such pacts. It then provides the details of the pact signed by several Indian banks. Lastly, the article lists the advantages of such pacts.
This article explains why central banks need to independent of the government. The pros and cons of having an independent central bank have been discussed. The effects of government meddling in the nation’s monetary policy have also been discussed.
This article explains the downfall of Chanda Kocchar. It provides a detailed explanation of the questionable loans that were made by Chanda Kocchar to the Videocon and Essar Group. Details about her personal dealings with the Videocon group have also been provided in this article.
This article explains the pros and cons of the Sun Trust and BB&T merger. It also explains how the merger is likely to affect the banking industry as a whole.
This article explains why Deutsche Bank is planning to merge with Commerzbank. It also lists down the advantages and disadvantages of this proposed merger.
This article explains why the process of setting benchmark interest rates like LIBOR (London Interbank Offered Rate) has an inherent conflict of interest. It also details the various instances where banks have rigged the process of interest rate determination in order to gain an unfair advantage
This article explains the concept of postal banking. It lists the problems associated with postal banking. It also provides historical context into postal banking services. Experiences of other countries such as Japan have also been provided in order to give a better explanation.
This article explains the details of the auto insurance scandal which has taken place in Wells Fargo. It also explains Wells Fargo’s justification about this scandal as well as how they plan to compensate their customers.
What is FinTech? Why do we hear it so often? What are its uses and misuses? How is it a game changer for banks and financial services firms? Can it be used to better the lives of less privileged? Moreover, is runaway FinTech a threat to the financial system? These are some of the questions that would be tackled in this article with the main focus being how FinTech has been is and going to be a game changer for BFSI firms.
This article explains why the Silicon Valley Bank crash can be considered to be an important event. The various ways in which the crash will affect the global market, as well as the global banking system, have been mentioned in the article.
This article explains the impact of the Silicon Valley Bank crisis. It lists the major areas where the impact is likely to be more visible and explains how the financials may be impacted.
This article explains the impact of increased interest rates on the Silicon Valley Bank. It provides a detailed explanation of the various ways in which increasing interest rates led to the fall of the Silicon Valley Bank.
This article explains how the risk management policies at Silicon Valley Bank were not up to the mark. It lists and explains the various lapses in risk management and how they impacted the bank.
This article explains how the various stakeholders will be impacted by the fall of Silicon Valley Bank. The different stakeholders have been listed as well as the impact of the collapse of the Silicon Valley Bank on these stakeholders has been analyzed.
This article explains the concept of bridge banking. It also explains how to bridge banking applies in the case of the Silicon Valley Bank failure. Details like the creation as well as dissolution of the bridge bank have also been explained in this article.
This article explains the role of social media in Silicon Valley Bank. It also explains why the impact of social media is high and what banks can do to mitigate this high impact.
This article explains the definition of a government bailout. It then explains how the actions of the Fed cannot be technically considered to be a bailout. However, in essence, it is still a bailout as it uses public money to prop up the value of private banks.
This article explains the shortcomings of the Bank Term Funding Program (BFTP). It critically analyses the provisions of the program and explains how these provisions could end up causing damage to the larger economic system.
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