What is Banking Sector?

The banking sector is the section of the economy devoted to the holding of financial assets for others, investing those financial assets as leverage to create more wealth and the regulation of those activities by government agencies. In simple words, Banking can be defined as the business activity of accepting and safeguarding money owned by other individuals and entities, and then lending out this money in order to earn a profit.

The Bank of Industry (BOI) targets the industrial sector of the economy. It is set up to encourage industrial production and value creation by manufacturing and processing activities of businesses. The objective is to provide the industrial sector with finance as well as business support services.

The newly appointed Managing Director and Chief Executive Officer of the Bank of Industry, Mr Rasheed Adejare Olaoluwa resumed duties at BOI’s head office in Lagos.

Its main objective is to promote industrial sector of the economy, in doing so, it is targeted at financing plants and equipment only. Financing raw materials and working capital of businesses are not in its financing preferences.

Different types of business banking services include:

  • Business loans.
  • Checking accounts.
  • Savings accounts.
  • Debit and credit cards.
  • Merchant services (credit card processing, reconciliation and reporting, check collection)
  • Cash management (payroll services, deposit services, etc.)

The Different Types of Banks

Banks may also provide financial services, such as wealth management, currency exchange, and safe deposit boxes. There are two types of banks: commercial/retail banks and investment banks. In most countries, banks are regulated by the national government or central bank.

The financial sector is a section of the economy made up of firms and institutions that provide financial services to commercial and retail customers.  A weak financial sector typically means the economy is weakening.

What Are Financial Institutions? The kinds of institutions that exist in the finance industry run the gamut from central banks to insurance companies and brokerage firms. …

  • Central Banks. …
  • Retail Banks. …
  • Commercial Banks. …
  • Shadow Banks. …
  • Investment Banks. …
  • Cooperative Banks. …
  • Credit Unions.

Finance Careers

  • Commercial banking.
  • Personal banking (or private banking)
  • Investment banking. …
  • Wealth management.
  • Corporate finance. …
  • Mortgages / lending.
  • Accounting.

The relationship between RBI (India’s Central Bank) and the Commercial Banks should be seen from the legal and regulatory angle. The RBI gets its powers and discharges its responsibilities as per the RBI (Reserve Bank of India Act) ACT 1934. The commercial banks function under the Banking Regulation Act 1949.

The RBI is the monetary authority of India and supervises all the banks (nationalized banks, banks in the private sector and co-operative banks) under its jurisdiction.

The RBI enjoys wide powers – it issues currency notes, provides liquidity to commercial banks, it regulates money supply and liquidity (through various instruments), inspects the books of commercial banks and can suspend operations of a bank if there are serious financial irregularities. It acts as the lender of the last resort to the commercial banking system.

Latest in Banking Industry

Private sector lender Axis Bank had reported a net profit of R 1,681 crore for the October-December quarter. From state-run State Bank of India (SBI) to private sector peers HDFC Bank and ICICI Bank, major banks today interest rates to the tune of 6.25-7.75 on the five-year income tax-saving fixed deposits.

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