CH 2
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This chapter includes:
The Function of banks and services.
Banks targets.
Organizational forms for banks.
Administrative and organizational structure
for the bank.
Accounting system in banks.
Accounting system in banks Properties.
Sources of funding for the bank.
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Banks several functions, including: Opening of current accounts and accepting
deposits.
Giving all kinds of the credit facilities (loans).
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The collection of commercial paper and
deducted and save these papers.
Buying and selling securities for the bank's
portfolio for the benefit of its customers.
Providing credit facilities indirect as opening
a letter of credit and provide letters of bank
guarantee and the financing of foreign trade
operations.
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Dealing in foreign currencies, buying and
selling, buying and selling traveler's checks
and internal and external transfers.
To carry out the first issue of the shares and
bonds of joint stock companies.
The secure funds for its customers to save
documents and jewelry.
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Profitability goal
Safety goal
liquidity
Notes there is a conflict between achieving
the stated objectives, which is a problem of
bank management,
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for example, can the bank to achieve a high
degree of liquidity, its retention of large by
cash in its treaseries, which means a lower
goal of profitability, and at the same time, the
bank could direct funds towards the high
investment risk for the purpose of increasing
profitability,
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but so be had offered money to a high risk,
which may result in many capital losses,
which leads to the second goal the
destruction of a safety investigation to the
depositors' money, and to achieve a balance
and there was no conflict between these
goals,
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we find that the first objective serves the
shareholders, while the second goal and third
it serves depositors, which need the
legislative intervention to resolve this matter
through what is issued by the monetary
authority of the regulations and instructions
in this regard.
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Banks take the following organizational
forms:
Branch Banks
Single Unit Banks
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E-banking
Automated Teller Machines
Home Banks
Point of Sale Terminals
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The objective of the organization in any
institute is to rearrange the available
resources to raise the productive efficiency of
the institution, and to achieve this goal is to
choose an appropriate administrative and
organizational structure,
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which can perform tasks and instructions by
the presence of several departments and so
that each of them be a description of their
work and their responsibilities and powers,
and for it is to look at the quality of services
and activities undertaken by the Bank
allocates each specialist department
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The banks accounting system are Featuring
then other accounting systems the existence
of its own system, which incorporates certain
elements similar to the elements and the
contents of any accounting system but in the
practical application differs greatly in terms
based on a set of rules and characteristics of
him dating back to the business's privacy and
the tasks and functions that performed by
commercial banks as follows: -
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Centralized accounting in the overall
management of the bank
Independent accounting for each branch
where the results of its work during the
period of time show
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Accounting system components in banks:
The account system in accordance with the
accounting rules .
Such as accounting theory and accounting
method and the group of documentary and
financial statements , statistical statements ,
equipment , systems regulatory , procedural
instructions and staff.
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Accounting system in banks characteristics:
Each section of the bank's departments
organize its operations and determine his
documents and disclosures , records
unilaterally assistance and audited.
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Are recognized limitations in the journal
entries to help with each section of the first
vouchers then organizes daily supplements
sent to the accounting department on the
same day to conduct conformity.
If it appears there is a difference between the
amounts recorded are searched for reasons
and treatment in coordination with the
Department of Accounting Branch.
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Each departments have to its calculations the
ledgers for all operations.
The accounting department at each branch to
prepare a daily review of major accounts and
the balance sent to the General Department
of Accounting head office of the bank.
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Be the main center of the accounts (Central
Accounting) the general management of the
bank is a place where flowing daily business
that comes from the bottom branches, so as
to prepare the trial balance and constraint in
the overall public accounts and extract
business results.
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Banks differ in terms of their dependence on
sources of funding, for example, commercial
banks are distinct from other banks in
reliance on sources of funding derived from
demand deposits and time deposits and
savings deposits, and the nature of financing
in commercial banks are often short or
medium term, given the nature of the basic
resources that depend on short-term
deposits
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The real estate agricultural and industrial
banks depend primarily on the capital as the
most important source of funding because
they deal in long-term loans and paid for
housing construction and financing of
factories.
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It can be divided into the bank resources
Internal sources of funding, such as:
The head of the depositor money from
shareholders and share premium and
reserves legal and optional reserves and
retained earnings
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These resources are all known as the equity
(shareholders) or the so-called bank's capital
base, according to the names of the Basel
Committee on Banking.
External sources of funding, such as:
Demand deposits (checking accounts) and
time deposits and deposits notify
And savings deposits.
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What is the importance of capital and its role
in the bank ??
Can be summarized function of capital as
follows: Regulatory function: to take advantage of it at
the beginning of the work of the bank as an
expense of incorporation and the
appointment of staff and the purchase of a
private in the first phase of the activities of
the bank assets.
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Operational function: to take advantage of it to
facilitate the operation of the Bank's business
administratively, financially and operationally.
Function to protect depositors 'money: where
that capital provides protection for depositors'
money against the risks faced by the Bank's
business (credit - the market - operating), and
that an increase of this size leads to support
the capital base, which boosts confidence in
the bank's performance and attracting
depositors.
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Investment function: Where can the bank part
of the capital investment in financing
activities next customer deposits.
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