Banks and other financial institutions play several important roles. They act as intermediaries between savers and borrowers, facilitating the flow of money and allocation of capital. Banks lower transaction costs and provide loans to businesses and individuals, fueling economic growth. Central banks oversee monetary policy at a national level while commercial banks accept deposits and make loans locally. Financial institutions provide liquidity and a marketplace for money and assets, allowing resources to be invested productively. Bank capital represents the net worth of a bank and includes assets like loans minus liabilities like deposits.

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Significance of banks /other financial institution
What are significance of banks and other financial institution?
Banks also play a central role in the transmission of monetary policy, one of the
government's most important tools for achieving economic growth without inflation. The central bank
controls the money supply at the national level, while banks facilitate the flow of money in the markets
within which they operate.
banks lower transactions costs and act as financial intermediaries—they bring savers and borrowers
together. Along with making transactions much safer and easier, banks also play a key role in the
creation of money. They provide loans for local businesses and individuals alike, helping each of us on
our paths toward success. Furthermore, they often help keep money flowing locally – lending and
funding in the communities where their customers live and work.
Financial institutions are important because they provide a marketplace for money and assets, so that
capital can be efficiently allocated to where it is most useful. For example, a bank takes in deposits from
customers and lends the money to borrowers. Banking and Finance explores the dynamic, fast-paced
world of money, shares, credit and investments. Finance is an essential part of our economy as it
provides the liquidity in terms of money or assets required for individuals and businesses to invest for
the future.
Banks as Financial Intermediaries, banks acts as financial intermediaries because they stand between
SAVERS and BORROWERS. Savers place deposits with banks, and then receive interest payments and
withdraw money. Borrowers receive loans from banks and repay the loans with interest. In turn, banks
return money to savers in the form of withdrawals, which also include interest payments from banks to
savers
Categories of banks and capitalization
CENTRAL BANKS- Is a financial institution that has exclusive authority over the generation and
distribution of money and credit for a country Banks of banks supervises and manages a country's
currency and credit policy
COMMERCIAL BANKS- Commercial banks accept public deposits for the purpose of lending or investing.
Provides financial service
SPECIALIZED BANKS- Banks that are banking operations that serve a specific type of economic activity
Ex. Industrial Banks, Agricultural Banks, investment banks, exchange banks etc.
What Is Bank Capital?
Bank capital is the difference between a bank's assets and its liabilities, and it represents the net worth
of the bank or its equity value to investors. The asset portion of a bank's capital includes
cash, government securities, and interest-earning loans (e.g., mortgages, letters of credit, and inter-bank
loans). Bank capital is a measure that appears on the liability side of the bank's balance sheet.
Banking premises- is the area of any building that a banking institution uses to conduct business,
within.
bank premises include • real estate that is owned and occupied (or to be occupied if under
construction) by a bank, its respective branches, or its consolidated subsidiaries
Banking offices- A banking office is a location created by a bank where it conducts general banking
operations and accepts deposits of cash or its equivalent from the general public. Any branch of an
insured nonmember bank is considered a banking office, and the main office of an insured state
nonmember bank is included as well.

2. Banking days and hours- the standard banking week of five (5) days, unless those days are declared
non-working holidays by the president, which includes local holidays. Unless otherwise approved by the
Bangko Sentral, it should fall on Mondays through Fridays in the best interests of the banking public.
That workers of the institution must conduct business on certain days for at least six (6) hours each day.
Types of Deposits
demand deposit is a conventional bank and savings account. You can withdraw the money anytime
from a demand deposit account.
- is a typical savings and bank account. From a demand deposit account, you can take the money out
whenever you choose.
Time deposits are those with a fixed time and usually pay a fixed interest rate, such as a certificate of
deposit.
- are investments that typically pay a fixed interest rate over a fixed period of time, like certificates of
deposit.
Deposit substitutes- are methods other than traditional bank deposits of raising money from the
public, such as the issue, endorsement, or acceptance of debt instruments for the borrower's own
account in order to finance the sale or purchase of receivables and other items.
Interest on deposit and deposit substitutes- It is the return on your deposits made to a financial
institution's account. The interest rates charged by financial institutions might vary, and a greater
interest rate means you will profit more. Deposit substitute means an alternative form of obtaining
funds from the public, other than deposits, through the issuance and endorsement.
Types of test
Multiple choice
True or false
Identification
Essay