looking for

Principles of modern bank or commercial bank

A successful and ideal modern bank follows some principles in order to ensure smooth running of banking business. To cope up with the prevailing competition, to provide better services to the clients and to gain competitive advantages commercial banks or modern banks have to be careful about their services. These are referred as principles.
The important principles of commercial bank are as follows-
1. Principles of liquidity: Deposits are the life blood of the commercial bank. Depositors are repayable on demand or after expiry of a certain period. Everyday depositors either deposit or withdraw cash. To meet the demand for cash, all commercial banks have to keep certain amount of cash in their custody.
2. Principles of profitability: The driving force of commercial enterprise is to generate profit. So it is true in case of commercial bank.
3. Principles of solvency: Commercial bank should have financially sound and maintain a required capital for running the business.
4. Principles of safety: While investing the fund, banks are to be cautions because bank’s money is depositor’s money. Unless the money lent out is safe, the banks can’t pay depositors money back. Therefore, the banks are considering very seriously the aspects of safety of the lent out money.
5. Principles of collection of savings: This is very important principles for today are banking business. Commercial banks always seek huge amount of idle money from the clients. Now a day’s banks fix up the target for their employees to generate more savings from the people.
6. Principles of loan and investment policy: the main earning sources of commercial banks are lending and investing money to the viable projects. So commercial banks always try to earn profit through sound investment.
7. Principles of economy: Commercial banks never go for any unnecessary expenditure. They always try to maintain their functions with economy that increase their yearly profit.
8. Principles of providing services: Commercial bank thinks that customer service should be done efficiently and promptly. A better service brings great reputation for the bank
9. Principles of secrecy: Commercial bank maintains and keeps the clients accounts secretly. Nobody except the legitimized person is allowed to see the accounts of the clients.
10. Principles of modernization: It is the age of science and technology. So to cope up with the advanced world the commercial bank has to adopt modern technical services like online banking, credit card etc.
11. Principles of specialization: It is an age of specialization. Here commercial banks segments their whole functions into various parts and place their human resources according to their efficiency.
12. Principles of location: Commercial banks choose a suitable site where the availability of customers is large.
13. Principles of relation: Commercial banks always try to maintain a good relation with their clients and potential customers.
14. Principles of publicity: It is an age of publicity. If you would like to earn more money, you have to give more advertisement through various media. In that case, commercial banks follow this kind of principles to increase their customers.
The successes of commercial banks depend on the performing of the above principles. The bank should prepare a course of action and to follow them.