Bank is A Unique and Important Economic Institution

The Bank is a financial institution that can provide a service to save money and to give credit to the people of both the consumptive and productive credit. Banks operating in the very need of funds from the public in form of savings and deposits are stored in the bank. Bank provides interest to the customers with a certain level of savings and deposits over the assets. Generally the interest rate in deposits is higher than the interest rate of savings. And then the bank channel it through a bank credit, for consumptive and productive credit in a specific interest rate. Margin on interest paid to customers and interest earned on loans that are channeled into this is that income Bank.

The decreasing of bank income is determined by economic circumstances. If the economic situation in the doldrums and credit channeled by many banks that can be jammed so bad impact for the operation of the bank itself. In difficult economic period will generally difficult for the savings and loan owned by the customers tend to be reduced because most savings will be interesting to spend.

To maintain the sustainability of Bank operations, bank management must be smart in tackling the risks that will likely arise in the world economy. Management must have a specific strategy that is used in case of things beyond a doubt. For certain banks will create a risk management division. Risk management is expected to make an assessment on the risks that will likely be faced and to prepare strategies on specific actions.

Besides dealing with the economic conditions of the world that is not stabilized, banks will also be presented at the competition between banks is quite strict. Does not even occur rarely will be a negative competition. In the face of competition among banks, the bank must have a high competitive advantage to be able to win the competition. The Bank must have a unique case that is not owned by the competitor and it is very difficult to be imitated. With this competitive advantage can be expected to defend the bank in the face of competition.

In addition to the tight competition banks are required to provide the prime services of its customers. Services provided should able to give confined and satisfaction to customers. Providing services in the bank should also consider diversification of services offered to customers. Payment services as well as telephone, electricity bills, credit purchases, ticket payment, insurance payment, and so forth.

In business banking the government will step in if almost all the major banks experience financial difficulty. This is done because the bank is a financial institution that plays an important role in the economy, the play of funds from the community to increase development in the real sector. In contrary, if the bank experienced a profit is quite high, government will support what has been done by the bank with the regulations. The growth of banking business is expected to stimulate the business and ultimately may increase the economic growth of a country. It seems simple but in practice many factors will affect each other to achieve an ideal economic growth.

We can conclude,The Bank is a financial institution that is unique and important role in the economy. So that the business is run by the bank, including a business that seems easy but in fact very risky and are exposed at the level of competition is high enough. The best bank is able to serve customers well in many circumstances, where this is not the direct impact will be good for economic progress in the area.