The goal of any bank is to make a profit. To increase their own income, credit organizations not only provide all kinds of services to citizens and companies, but also constantly carry out operations to raise funds, which are otherwise called passive.
The accumulation of funds in the bank accounts is carried out through passive operations. It is they who are called upon to provide the credit organization with the resources it needs to finance its activities and active work in the service market.
The essence of passive operations
The credit institution carries out passive operations in order to increase the resource base. Own resources are formed at the expense of share premium and profit from doing business. They are spent on covering priority and current expenses, creating reserves for possible losses, and acquiring long-term assets.
Due to the deposits attracted from the population and the receipt of credits and loans from other organizations, borrowed resources are increased. They are used to conduct active operations, and, first of all, lending. Since all borrowed resources are paid for by the bank, they can be lent to the bank's clients only at a higher interest rate.
The purpose and meaning of passive operations is:
- achieving an optimal balance between own and borrowed resources;
- attraction of borrowed resources at the lowest possible price;
- elimination of cash gaps in work.
Types of credit institutions' liabilities
Passive operations can be conditionally divided into 2 types: deposit and non-deposit. Deposit operations are called operations to attract temporarily free funds from the population and legal entities and place them in deposits: either on demand, or for a period specified in the agreement. Deposits and deposits make up a significant portion of the liabilities of many banks.
Today, in the product lines of domestic banks, one can find deposits with a variety of conditions. Deposits differ in terms of timing, method of calculating interest, the ability to replenish the deposit or withdraw part of it, as well as the presence of additional bonuses (for example, free services or gifts). For depositors who have been cooperating with a commercial bank for a long time, discounts are often provided for carrying out any active operations, for example, paying bills or transferring funds.
It is customary to refer to non-deposit operations:
- the primary issue of securities: large commercial banks often resort to issuing their own shares to cover the costs of large-scale projects, moreover, they issue both ordinary and preferred shares;
- obtaining loans and credits from other legal entities - interbank credits and loans from the Bank of Russia are a serious source of replenishing the deficit of resources for many banks;
- the formation or increase of funds at the expense of the bank's profits - these funds are intended to cover losses on loans, depreciated securities, as well as to compensate for other large losses.
