Objectives of Bank
A bank is a financial institution. It is one kind of financial institution which deals with money and other monetary instruments and conducts business. Bank receives deposits from one group of people and lends it to other groups of people. By this process, the bank earns a profit. Profit is the main objective of a bank. But a bank is different from other financial institution. So, its objectives are also different in some factors. Here we discussed some objectives of bank,
- Marketing profit
Marketing profit is the main task of all banks except the central bank. Bask creates profit from money transaction. Bank takes more interest from debtor than give interest to depositors. The difference between these two makes a profit for Bank.
- Issuing Notes
The Central bank has the sole power to issue the note. Other banks make the availability of note in the market. No other Bank can issue note.
- Controlling of money market
The most fundamental duty of central bank is to control the money market. For this, it has to take help from other commercial banks. To control money market central bank and other bank have to work jointly.
- Creating utility of currency
To make utility currency commercial banks always work actively. Several kinds of monetary instruments are used by banks to create utility and speed up the flow of the economy.
- Rendering service
Commercial banks render service to people by various activities. By serving people banks earn the profit and increase goodwill.
- Taking deposits and giving loan
Deposit is the lifeblood of a bank and the lending is the life-supporting main function of the bank. So the bank is established to take a deposit from one group of people and lend it to another group.
- Economic development
Bank and the economic development are inter-related to each other. Basically, bank increase the credit creation, infrastructural development, internal trade financing, remittance etc., those are the indicator of the economic development.
- Dealing in foreign exchange
Bank deals with the foreign exchange as the authorized dealer. They purchase and sell foreign currencies to the intending sellers and the buyers at the market rates.
- Development of standard at living
Bank helps people to make their life easy, flexible, and standard. It gives standard salary to its employees. Bank gives loan to many types of commercial sectors for the development.
The bank has the principle and the ancillary functions that create the significant role of the bank. Above discussed points must be followed by the bank to sustain and to create goodwill in the market so sophistically comparing to the core competitors.