The important financial elements-Bank
There are various ways a bank can generate revenue, which includes mainly interest, fees for the transactions and also the financial advice a bank provides to huge companies or businessmen. Interest is the main medium to generate revenue from the capital that the banks lend to their customers in the form of loans.
Certain banks make it easier for customers to make huge transactions through cards like debit cards, credit cards, prepaid cards and smart cards so that one doesn’t have to carry cash notes in order to make a payment for example incase of buying a house. Some of the countries where the financial systems are not that advanced often use cash to make payments instead of such cards.
A Bank with successful results is the one, which manages to ensure that they make profit even at the worse market conditions. Maximum revenue for the banks comes from interest. The other options are from financial advice provided to the businessmen and some of the huge companies working on a large scale. Some of the revenue is also gained from the transaction fees.
There are a lot of risks involved in the business of banking. And the only way they manage to remain profitable is the way they handle the crisis. The risks that are involved are as follows: reputational risk which is a risk evolved from losing the trust of their customers which is due to improper behavior and should be checked from time to time. Operational risk is if the bank performs carelessly and neglects the proper execution that needs to be maintained. Credit risk is when the customer fails to make the payment.
The other risks involving are: market risk, which is affected due to the market conditions. The last one remaining is liquidity risk, which happens assets cannot to be converted due to unfavorable market condition. These risks can damage a banks reputation and should be taken care of before it’s too late to handle.
There is a term as money creation, which happens whenever a bank gives out a huge loan in a fractional reserve banking system because of which altogether a new sum of virtual money is created for its replacement.
Most of the reputed banks have customer complaint forms where they listen to the complaints of their customers and adhere to the feedbacks and revert back in the best possible way. Similarly even banks like bank of Baroda and bank of India have made errors with the customers due to which they have lost their future customers. Banks need to work on their services in order to maintain the number of their customers, which is an important aspect to avoid bankruptcy.
Mostly complaints related to Bank of Baroda have been for their services and not professional attitude towards their customers. This shows the neglecting attitude towards working for the image of the bank, which can harm the banks contribution for revenue. Bank of Baroda complaints have been the maximum when it comes to counting the complaints received on the charts. Being one of the largest public sector banks the complaints are not befitting. It is one of the largest banks. Complaints against such public sector banks should be taken on high priority.
Against Bank of India complaints like delay in service where on priority. There were issues with the slow services of the bank. The bank activates various services taking more days than promised. This caused the customer to lose their patience and this can also motivate the customers to switch banks which will make them lose their valued customers. These mal functions are performed when there is no proper management.
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