Therefore, to cope with the advancements in the world, commercial banks adopt modern technical services like online banking, mobile banking, etc. We live in an era of technology as well as modernization. Also, access to the accounts is given only to legitimized persons. Principles of SecrecyĬommercial banks ensure that they keep the accounts of their clients secret. After all, good service ensures a better reputation and therefore, profits. Principles of providing servicesĬommercial banks are usually service-focused banks. Therefore, they try to manage their functions within a set budget and increase their profits. Principles of EconomyĬommercial banks always try to avoid any unnecessary expenditure. Therefore, banks need strong loans and investment policies to earn a good profit. It also ensures that the investor’s money is invested in viable projects. Principles of Loans and Investment PolicyĪ commercial bank primarily earns money through its lending and investing activities. In fact, bank employees are given targets to collect more savings from people. Commercial banks seek huge amounts of idle money from their clients. This is one of the most important principles in the current banking scenario. However, since it is investing the investor’s money it keeps the safety of the money first. Principles of SafetyĪ commercial bank accepts deposits from its customers and then invests it. Learn more about Types of Banking here in detail. Further, they need to maintain a certain required capital for running the business. State Bank of India and its Associate BanksĬommercial banks must be financially sound.A commercial bank is a commercial enterprise as well. Source: Clipart Library Principles of ProfitabilityĪny commercial enterprise primarily tries to generate profit. therefore, all commercial banks have to keep a certain amount of cash in their custody to meet the cash demands of customers. Time deposits which the bank has to repay after the expiry of a certain periodįurther, on a daily basis, customers withdraw as well as deposit cash.Demand deposits which the bank has to repay on demand like a Savings Account and.Principles of Commercial Banking Principles of LiquidityĪ commercial bank offers two types of deposits
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