Management of fund:
The two main function of a bank are borrowing money from public by accepting deposits and lending to others for development of trade, commerce, industry and agriculture. A banker’s dealer in money and credit. It acts as financial intermediaries between savers and investors. It is a profit seeking business concern as any other commercial on industrial organization. The bank resources are slightly different from other business concern as it depends upon the mobilization of deposits from the public. Their owned fund (share capital and reserves) constitute generally not more than 10 % of the total. A banks main source of fund is the deposits made by the customers. So, a bankers has to pay interest to depositors at prescribe rate and meet the demand of money when their require it.
2.17 Sources of fund of the premier bank.
2.17.1 Paid up share capital: Paid-up share capital indicates the contribution made by the shareholders of the bank.
2.17.2 Reserve fund and undistributed profits: Reserve Fund is the amount accumulated over the years out of undistributed profit. It actually belongs to the shareholders. The accumulation of such retained reserves is an essential condition for financial soundness, stability and growth of the banks to fulfill special roles assigned to them from time to time. Besides, such reserves provide a cushion for meeting unforeseen contingencies. The Reserve Fund operates as an additional security to the bank's customers.
2.17.3 Deposits from the public in various accounts: Deposits from public represent by far the most powerful source of funds to a bank, accounting for over 90% of the total. These deposits are the key to a bank's potential growth. These funds are liabilities of the bank, because these have to be returned to the owners on demand. The principal types of deposit offered traditionally by all the major banks are Current deposits, Savings bank deposit and Fixed or Term deposits.
2.17.4 Borrowings from the Bangladesh Bank and other banks: Borrowing from the Bangladesh Bank and other banks also source of fund. In the emergency situation The Premier Bank Limited like other local commercial bank borrows money from Bangladesh bank and other local banks with very high rate of interest. Though it is not a regular of option of fund, but it is also very important in crisis situation. It takes secured and unsecured loan from banks. Bangladesh plays as a last resort for all commercial bank as well as for The premier Bank also.
The two main function of a bank are borrowing money from public by accepting deposits and lending to others for development of trade, commerce, industry and agriculture. A banker’s dealer in money and credit. It acts as financial intermediaries between savers and investors. It is a profit seeking business concern as any other commercial on industrial organization. The bank resources are slightly different from other business concern as it depends upon the mobilization of deposits from the public. Their owned fund (share capital and reserves) constitute generally not more than 10 % of the total. A banks main source of fund is the deposits made by the customers. So, a bankers has to pay interest to depositors at prescribe rate and meet the demand of money when their require it.
2.17 Sources of fund of the premier bank.
2.17.1 Paid up share capital: Paid-up share capital indicates the contribution made by the shareholders of the bank.
2.17.2 Reserve fund and undistributed profits: Reserve Fund is the amount accumulated over the years out of undistributed profit. It actually belongs to the shareholders. The accumulation of such retained reserves is an essential condition for financial soundness, stability and growth of the banks to fulfill special roles assigned to them from time to time. Besides, such reserves provide a cushion for meeting unforeseen contingencies. The Reserve Fund operates as an additional security to the bank's customers.
2.17.3 Deposits from the public in various accounts: Deposits from public represent by far the most powerful source of funds to a bank, accounting for over 90% of the total. These deposits are the key to a bank's potential growth. These funds are liabilities of the bank, because these have to be returned to the owners on demand. The principal types of deposit offered traditionally by all the major banks are Current deposits, Savings bank deposit and Fixed or Term deposits.
2.17.4 Borrowings from the Bangladesh Bank and other banks: Borrowing from the Bangladesh Bank and other banks also source of fund. In the emergency situation The Premier Bank Limited like other local commercial bank borrows money from Bangladesh bank and other local banks with very high rate of interest. Though it is not a regular of option of fund, but it is also very important in crisis situation. It takes secured and unsecured loan from banks. Bangladesh plays as a last resort for all commercial bank as well as for The premier Bank also.
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