3. Economic justification for banks
In determining this particular aspect, the
organizers must be armed with facts and figures
which they have to analyze carefully before they
can proceed with their project.
4. Selection of stockholders
The organizers also have to contend themselves
with the selection of stockholders. This is an
essential consideration in setting up a bank
because on such choice may depend its success or
failure.
5. The determination of the kind of bank
to be formed
Determination of the type of bank depends upon the
economic survey. The survey will include the level of
income of the community, the businesses and industries,
the population of the place, the number of banks or
financial institutions, and factors which will lead to a
decision on the size of the organization to be set up.
6. Determination of the amount of capital
to be raised
The organizers will find it easier to determine the
amount of capital to be raised after they have
agreed on the type of the bank. They must be
aware that at least the minimum requirements
should be met.
30. Why banks are established as corporations
A corporation is formed by a number of persons who pool
in their resources to enter a business for profit.
Banks, which by their very nature, deal in large amounts
of capital. Furthermore, loans are given out for a long
durations in some instances and only an entity with a long
tenure could be beneficial in such a case.
31. The delegation of management to a few who
compose the board of directors, will allow
flexible management, expansion, as well as
departmentalization. This method of
administration leads to specialization and division
of labor which favor’s bank’s function.
32. Bank Location
Anyone imbued with business sense will perhaps
know that a poor location will be deterrent to an
otherwise profitable venture.
Customers always look for places which offer a
wide variety of conveniences in meeting their
needs.
33. There are many factors which will influence the
choice of the bank’s location. To fulfill the needs
of strategic sites, the organizers must have in
mind the availability of transportation. Whether
the location is within the commercial district or
not, the accessibility of the place both to human
and vehicular traffic should be considered.
This will enhance the chances of the bank attract
the greatest number of potential depositors and
customers.
34. Role of Regulatory Government Bodies in
Bank Organization
The role of the regulatory government bodies in
the bank organization is to facilitate the
processing and approval of pertinent documents
to make the organization legal.
35. The Securities and Exchange Commission
For its part, also duly examines the paper to see
to it that all requirements are met before issuing
the certificate of incorporation.