Correspondent, Mixed and Universal Banking.

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    22-Oct-2015

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<p>CORRESPONDENT BANKING: Correspondent bank is a financial institution that provides services on behalf of another, equal or unequal, financial institutions.</p> <p> It conducts business transactions, accept deposits and gather documents on behalf of other financial institutions.</p> <p> Common in international banking transactions. </p> <p> Under this system, unit banks are linked with bigger banks and these banks are linked with still bigger banks in the financial centers.</p> <p> The smaller banks deposit their cash reserve with bigger banks. The bigger banks with whom such deposits are so made are called correspondent banks.</p> <p> Correspondent banks are intermediaries through which all banks are linked with bigger banks in financial centers.</p> <p> Main services include- collecting of bills, making foreign currency payments/remittance on behalf of customers of Indian </p> <p>MIXED BANKING: When a bank combines the deposit as well as investment banking activities, it is called mixed banking. In other words, when banks perform the dual function of commercial banking and investment banking, i.e., provides long term lending to industries. It is called mixed banking. It stared in Germany, after industrial development took place. There were no banks in Germany to provide long term finance to these industrial units. So the commercial banks in Germany were forced to finance to these industries both for short-term as well as for long-term requirements. These banks, were therefore, called mixed banking. That is they were doing the functiion of a commercial banks as well as investment.</p> <p>UNIVERSAL BANKING Universal banking is a name given to banks engaged in diverse kinds of banking activities. Under this, the banks do broad based and comprehensive activities which include making loans and advances for long term, providing working capital, corporate advisory services, insurance, venture capital etc. Common in some European countries, including Switzerland. In India, SBI is practicing broad universal banking.</p>

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