Categorie
Check City St George Ut

Liabilities and Assets of Scheduled Commercial Banks (principal products)

Liabilities and Assets of Scheduled Commercial Banks (principal products)

The table shows (a) that banking institutions enhance the majority of their funds by attempting to sell deposits—their principal obligation, and (b) they hold their assets mainly by means of (i) loans and improvements and bills reduced and bought, together constituting bank credit, (ii) investment, and (iii) money.

A brief description regarding the primary components of liabilities and assets is offered below:

Liabilities of Banking institutions:

1. Capital and Reserves:

Together they constitute owned funds of banking institutions. Capital represents paid-up money, i.e., the total amount of share money really added by owners (shareholders) banking institutions. Reserves are retained profits or undistributed earnings of banking institutions accumulated over their lives that are working. What the law states requires that such reserves are accumulated and that not absolutely all the earned profits are distributed on the list of investors.