The term corporate banking has recently gained much popularity in the banking sector of the country. Corporate banking refers to customized and tailor- made facilities, which a commercial bank provides to large firms, listed companies or corporations who happen to be their customers. Such corporate customers enjoy certain special facilities and services from banks, because of the large quantity of business they provide. The most important function of corporate banking is the management of working capital of the corporation that is a customer of the bank.
The main point of difference between retail banking and corporate banking is that in case of retail banking the bank deals with an individual customer and his/her individual account, but in case of corporate banking the bank is concerned with multiple accounts of the listed company or large firm together with the accounts of its employees.
The following are some of the major features of corporate banking:
• Commercial banks provide foreign exchange transaction facilities to its corporate customers. This involves currency transactions and services involving foreign investments.
• Insurance facilities are provided by commercial banks to the staff and management of the corporations apart from insuring several activities of these large firms.
• Banks provide financial advice to corporations regarding merger, taxation, expansion of functions and other such issues.
• Financing existent and new projects of the corporations by sanctioning loans, is another facility which a bank provides to its special corporate customers.
• Banks also provide regular audit facilities to large firms to keep the financial statements of the corporation in order.
• Asset custody is another important service provided by banks to corporate companies. The bank manages the bank accounts of its corporate customers. This often involves issuing status reports of the financial state of these large firms on a quarterly or annual basis.
• Banks also often buy shares of its corporate customers so that the firm is able to enjoy greater liquidity required for its functioning.
Corporate banking is one aspect of the banking sector which is gaining greater importance each day. Corporate banking is a crucial requirement in the running of a large firm or a listed company because proper management of finance is the key to a successful company. It ensures that the business runs smoothly, helping in short run as well as long run expansion and greater profits of the company.
Corporate banking services are a basic necessity for a large company to manage, invest and diversify its existing monetary assets. It makes every day money management much easier and more effective for the company and its owners.
The main point of difference between retail banking and corporate banking is that in case of retail banking the bank deals with an individual customer and his/her individual account, but in case of corporate banking the bank is concerned with multiple accounts of the listed company or large firm together with the accounts of its employees.
The following are some of the major features of corporate banking:
• Commercial banks provide foreign exchange transaction facilities to its corporate customers. This involves currency transactions and services involving foreign investments.
• Insurance facilities are provided by commercial banks to the staff and management of the corporations apart from insuring several activities of these large firms.
• Banks provide financial advice to corporations regarding merger, taxation, expansion of functions and other such issues.
• Financing existent and new projects of the corporations by sanctioning loans, is another facility which a bank provides to its special corporate customers.
• Banks also provide regular audit facilities to large firms to keep the financial statements of the corporation in order.
• Asset custody is another important service provided by banks to corporate companies. The bank manages the bank accounts of its corporate customers. This often involves issuing status reports of the financial state of these large firms on a quarterly or annual basis.
• Banks also often buy shares of its corporate customers so that the firm is able to enjoy greater liquidity required for its functioning.
Corporate banking is one aspect of the banking sector which is gaining greater importance each day. Corporate banking is a crucial requirement in the running of a large firm or a listed company because proper management of finance is the key to a successful company. It ensures that the business runs smoothly, helping in short run as well as long run expansion and greater profits of the company.
Corporate banking services are a basic necessity for a large company to manage, invest and diversify its existing monetary assets. It makes every day money management much easier and more effective for the company and its owners.
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