Deposit Mobilization (Procedures) | निक्षेप परिचालन कसरि गर्ने

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Deposit mobilization

What is deposit mobilization?

Deposit mobilization is an integral part of any bank. It is the primary function of any commercial banks. Bank cannot achieve its goal and objective without mobilizing the deposit in the right sector in different activities.

Banks will have to show an ascending order if profit in order to ensure growth with stability. For this purpose, the bank will have to allocate the resources to different sectors in such a way the bank can gain adequate profitability.

Therefore, banks should mobilize their deposits in suitable and profitable banking activities in the right sector.

Generally, a bank has to mobilize its deposit in the following activities-

1. Liquid Fund

A bank has to keep enough amount of liquid funds. The funds have so many responsibilities in banking activities. Liquid funds have to cover the following transactions.

  • Cash in hand (Vault cash)
  • Cash at Central Bank
  • Cash at B & FIs
  • CRR/SLR

2. Credit 

Bank mobilizes its funds or deposits by providing different types of loan (credit) by charging a fixed interest rate. Different types of loan and advances are offered to customers. Such as –

  • Working capital loan
  • Term loan
  • Consumer loan

3. Investment

Banks invest their funds in different banking activities and different fields. There are many investment fields in the market. The bank should invest only in profitable and safe activities. Different investment options might be –

  • Share and debenture
  • Government securities
  • Joint-venture etc.

 Money market – Investment in 1 year or less than a 1-year time period of project.

Capital Market – Investment in more than 1 year of time period of project.

4. Fixed Assets

Land and buildings are essential for the establishment of the bank. Bank’s funds are used in buying furniture, vehicle, computer,  and other necessary assets which are used for banking activities. Even though the bank cannot gain direct profit from fixed assets, the bank has to buy these assets.

5. Operating and Miscellaneous Expenses

A bank should manage funds for administrative and other miscellaneous expenses such as

  • Salary of the employee/Allowances/Bonus
  • Advertisement and promotion
  • Stationary and rent
  • Donation, income tax, insurance, tour expenses

The miscellaneous expenses include –

  • Divident to share holders
  • Bear the loss on sale and purchase of banking assets
  • Maintenance expenses
  • Reserved fund etc.

Q. What is deposit mobilization? Explain deposit management. 

निक्षेप परिचालन भनेको के हो? निक्षेप व्यवस्थापन कसरि गर्न सकिन्छ?

– Deposit management is the task of collecting the maximum deposit at low cost and mobilizing collected deposit in various profitable fields in order to gain the maximum profit.