Wednesday, December 11, 2013

Major Variations In National And International Banks - Points Of Discussion

National banks are local banks which are within the boundaries of the country and International banks are foreign banks which are outside the boundaries or across the globe or have banks in two or more countries. The banking sector has changed a lot in many ways.

The major variations in National and International banks are:

National Banks
  • These financial institutions are owned by the state, government and people.
  • These banks have grown very effectively and efficiently with amazing improvement.
  • The quality of assets is better.
  • If you peep into the past you can clearly see that there were no ATM’s facilities provided by Indian financial institutions but with the advancement today you can avail this facility at any time and from anywhere.
  • The working levels have also improved as before five years there were only 20 branches. 
International Banks
  • The head quarters of these banks are situated in different countries.
  • The new change has implemented by the RBI (Reserve Bank of India) that now international banks can buy private banks.
  • It includes high costs when managing cross currency exposure for the future expansion and there will be constant change in hedging the cost.
  • The withdrawals and deposits are limited to $50,000 per month and they can exceed the limit only four times annually and after this banks will be automatically upgraded for the next level account.
  • The limitation for 50000 is imposed over small banks and the wire transfer of funds is also banned for these institutions.
  • To give better chances to agents working in banking sectors the policies and terms are being modified on such a level that agents could earn more benefits through different schemes.

The fact is that financial stability cannot be assured without the proper understanding of the banking sectors. The variations are done so that more revenue will generate. Therefore from the last few years the banks are performing very complicated functions. Most of the banks keeps risk on their balance sheet and do not save capital and these variations will help in controlling the capital. 

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