Role Of Commercial Banks Research Articles

Еволюція ролі та функцій комерційних банків в економічній системі: теоретико-історичний підхід

The aim of the article is to deepen and develop the scientific foundations of the evolution of the functions and role of commercial banks in the economic system through the transformation of the essence of banking activities and the emergence of new financial instruments in historical retrospective. The article summarizes scientific approaches to describing the evolution of the functions of commercial banks in historical retrospective; the essence of the transformation of banking activity due to growing risks and competition in financial markets is disclosed; an extended list of functions of commercial banks in today’s conditions is provided; the dynamics of the number of commercial banks in the leading countries of the world and countries with emerging markets is analyzed; tendencies and prospects for the development of banking and functions of commercial banks in the context of globalization of the economy and the introduction of novel digital financial instruments are substantiated. A functional analysis of the role and importance of commercial banks in the economic system for the period from the 16th century AD to the present is carried out. It is emphasized that in modern conditions banks are turning into institutions for servicing speculative flows. At the same time, the main function of commercial banks – lending to the real sector of the economy – begins to fade into the background due to low profitability. The essence of banking activity and features of new functions of banks over the past 25 years are disclosed. It is emphasized that computerization and financial innovations have significantly changed the ways of functioning of commercial banks. These processes made it possible to introduce new forms of service and types of banking products, improve bank management, collect and process large amounts of statistical information, and expand the scope of activities of large banks beyond national borders. It is proved that the timeliness and continuity of saturation of the economy with monetary resources is influenced not only by the number of commercial banks, but also by the mechanism for ensuring solvency and effective redistribution of cash flows between owners of funds and recipients of credit resources – both individual banks and the banking system as a whole. Proposals on the role and importance of commercial banks for the economy, based on their ability to increase the efficiency of the functioning of the economic system, have been substantiated. The essence of the transformation function of banks is that, transforming the space, size, terms, risks, illiquid assets into liquid liabilities, liquidity, purchasing power, information, banks play an important role in the State, as it allows to reduce risks in the economic system and social costs. Prospect for further research in this direction is to determine the impact of transformation of the role and functions of commercial banks on the macro-financial stability of the State and global financial markets.

The Role of Commercial Banks in the Performance of SMEs in Kigamboni District, Tanzania

The Role of Commercial Banks in the Performance of SMEs in Kigamboni District, Tanzania

БАНКОВСКИЙ СЕКТОР РОССИИ: АНАЛИЗ ТЕКУЩЕГО СОСТОЯНИЯ

This article provides an analysis of the Russian banking sector. It is noted that it is the most important economic institution for the development of the state. The growth rates of lending in various fields, as well as the growth rates of fundraising, are given. To date, the entire Russian economy has faced external geopolitical shocks, so the issue of adapting different sectors to the realities of the current situation is becoming the most urgent. The role of commercial banks in the economy is difficult to reduce, they are in many ways sources of financing for businesses. This ensures the economic growth of the national economy.

Fostering Rural Development through Improved Financial Inclusion in Thoothukudi District: The Involvement of Commercial Banks.

This research delves into the dynamics of economic growth and development in Thoothukudi District, Tamil Nadu, India, with a specific focus on the role of commercial banks in fostering financial inclusion and rural development. The study explores the challenges faced by rural communities in accessing formal banking services and examines the effectiveness of current financial inclusion initiatives. Utilizing a mixed-methods research design, including surveys and factor analysis, the research identifies three dimensions of financial inclusion: Utilization, Approach, and Quality of Services. The findings indicate positive perceptions regarding the convenience and accessibility of banking services, with room for improvement in documentation processes, communication, and the adoption of digital banking. Confirmatory Factor Analysis validates the dimensions, revealing good to very good fits. The study concludes with actionable recommendations for banks to enhance their role in promoting sustainable rural development, emphasizing technological innovation, improved communication, and a customer-centric approach.

The Impact of Commercial Banks' Interest Rate Policies on SME Innovation under Digital Inclusive Finance

Digital inclusive finance, as a new financial service model, promotes small and medium-sized enterprise innovation by providing easier financing through various technological means. The government's regulatory policies and commercial banks' interest rate policies have an impact on their financing services, thus affecting SME innovation. In addition, relevant studies are less concerned with the role of commercial banks' interest rates in SME innovation. In order to examine the effects of commercial banks' lending rates, government regulation, and SMEs' innovation benefits and costs on the evolutionary game, we build a three-party evolutionary game model of commercial banks, government, and small and medium-sized enterprises in a digital inclusive finance environment. It is found that commercial banks and the government agree on an appropriate interest rate policy to help SMEs innovate while protecting their interests. To control SME innovation, the government must play a significant role in the regulation of digital inclusive finance; commercial banks should lower the loan interest rate ceiling to support SME innovation; and SMEs should strengthen themselves to obtain high-quality loans so that they can better innovate.

FOREIGN EXPERIENCE IN INCREASING THE COMPETITIVENESS OF COMMERCIAL BANKS

In modern economic conditions, the sustainable development of the state, the expansion of the economic sector and the achievement of a quality standard of living of the population is not possible without the effective functioning of the financial sector, which is the most important sector that ensures the vital activity of all sectors of the economy. The role of commercial banks as the driving force behind the development of the financial sector in the age of progress in science and technology has increased significantly and continues to grow rapidly. The article analyzes foreign experience in increasing the competitiveness of commercial banks and the prospects for its application in Uzbekistan. The purpose of the study is to designate the main directions in the field of increasing the competitiveness of a commercial bank. The results of the study can be used in the system of making strategic decisions for the development of countries with economies in transition.

The Relationship between Commercial Banks Characteristic and Economic Growth in Vietnam

This paper examines the relationship between commercial banks' characteristics and economic growth in Vietnam using the FEM and REM models to test the effect of commercial bank characteristics on economic growth in Vietnam. Using a panel dataset of 28 commercial banks from 2010 to 2021, we investigate the impact of bank characteristics on economic growth and provide some important findings. Our findings show that bank characteristics significantly affect economic growth. These results suggest that policymakers should focus on controlling banks’ activities to support economic growth in Vietnam. Overall, this study contributes to the existing literature on the role of commercial banks in promoting economic growth in developing countries like Vietnam.

How Sophisticated is Green Banking in Poland and Romania? A Case Study of Bank Offers

The role of commercial banks in promoting sustainable development goals in Europe has gained ground recently. The momentum is also due to the Green Deal context. Their activity has shifted towards the achievement of such goals by getting involved in environmental projects or by raising awareness about sustainability. Their endeavors can also be directly reflected in the products and services they provide to the population and businesses. This is how commercial banks have taken up the role of educating the public towards sustainability and sustainable development goals. The aim of this paper is to investigate the green banking products and services of the largest five banks, by the number of clients, in Poland in Romania. A descriptive qualitative analysis is used to estimate the degree of sophistication of green banking products and services in the two countries.

Impact of agricultural financing on agricultural output: the role of commercial banks

The study investigates the impact of agricultural financing by commercial banks on agricultural output in Nigeria. Agricultural sector contribution to GDP was used to define agricultural output, while the agricultural financing was defined by commercial bank credit to the agricultural sector. The study employed real interest rate and inflation rate as control variables. The time span under study was 40 years which dated from 1981-2020 using annual secondary data, Data on agricultural output and commercial bank agricultural financing, were obtained from the Nigerian central bank annual statistical bulletin(CBN) whereas interest rate and inflation rate were obtained from united nation conference on trade and development (UNCTAD). The Autoregressive Distribution Lag (ARDL) was adopted due to its efficiency, robustness and dynamic nature in time series analysis. It was discovered the explanatory variables under study only have a long run relationship with the explained variable. Specifically, commercial bank agricultural financing rate has a positive and substantial impact on agricultural output whereas real interest rate and inflation rate have a negative and insignificant relationship with agricultural output in the long run. The study recommends that reliable sources of agricultural financing should be developed and policies aimed at boosting allocation of credit to agricultural sector should be created and implemented correctly so as to increase agricultural output.

Role of Commercial Banks in Stimulating Investments Amid Exchange Rate Fluctuations in Iraq

When it comes to boosting the economy, development, and allocation of financial resources from accessible savings to be employed in all economic sectors (industrial, agricultural, and service), commercial banks in developing and Arab countries are seen as one of the tools. Foreign and domestic investment play critical roles in the economies of both established and developing nations by providing much-needed capital, allowing for the more efficient use of available natural and human resources, and allowing for the more rapid adoption of cutting-edge technologies. Investment success depends on the presence of institutions and capacities of a developed financial and banking type. The significance of this study can be seen in how it examines the reality of commercial banks and their function in promoting and activating domestic and international investment in the context of exchange rate fluctuations, taking into account the financial resources and financial surpluses that commercial banks have available to them to lend money and credit to promote local investment. The banking system, including commercial banks, suffers from challenges since the eighties and nineties of the last century due to wars and the effects of the economic blockade, up to the after 2003 political and security events, in addition to accumulations in banking laws and regulations that did not contribute to the development of the banking sector in Iraq. Also, commercial banks did not contribute effectively to financing investment, and this is evident from the low level of funding for local investments. In addition, the structural imbalances in the Iraqi economy, the deterioration of infrastructure, and the repercussions of Corona led to the reluctance of investors to invest in Iraq. The investment environment available in Iraq is a suitable environment for investment and provides capacity. However, the political and security challenges facing the country and the administrative and financial corruption in most parts of the state have negatively affected the volume of investments in a way that is not commensurate with the volume of available natural and human resources and available investment opportunities. The most important conclusions of this research were as follows

The role of commercial banks in the development of agriculture through green lending

The role of commercial banks in the development of agriculture through green lending

The ends and means of banking: the Royal Bank of Scotland after the 2008 crisis

ABSTRACT The distress wreaked on small businesses by the Royal Bank of Scotland’s turnaround division, the Global Restructuring Group, is one of the most egregious examples of bank misconduct in recent decades. Such misconduct invites reflection on the role of commercial banks in the creation and use of money. To what ends and by what means do commercial banks perform this role? This article considers ends in the sense of whose interests banks ought to serve; and it considers means in the sense of the allocation of decision-making authority. It then turns to the drama of RBS after 2008 to document how allocations of decision-making authority by corporate law and secured transactions law benefited short-term financial interests to the detriment of RBS’s small business customers. It concludes by suggesting an alternative distribution of decision-making authority to counteract such short-term financial interests.

The role of commercial bank in financing small and medium enterprises: Evidence from Majmaa city during 2020- 2021

This research aims to study the role of commercial banks in financing small and medium enterprises in the Kingdom of Saudi Arabia. The small and medium enterprises sector considered as an important sector in the national economy, due to its contribution to providing jobs, and an Increasing in Individual Income. The study assumes a statistically significant relationship between the financing of commercial banks and small and medium enterprises. In this research, the descriptive- analytical approach was used for obtaining the relevant primary data. In this regard, the researchers have designed a questionnaire to collect the necessary answers to study the variables of the study and test the study hypotheses. Moreover, the other approach that the researchers relied on is the deductive approach, where information deduced from original sources and references. The Important results we have achieved here, Small and medium enterprises Provides estimated percentage of employment, the financing provided does not comply with the client's requirements, and the conditions imposed by commercial banks on projects are intractable. The most important recommendations is, an Increasing the amount of financing provided to small and medium enterprises, Facilitating the conditions for granting loans to small and medium enterprises, and The state and official bodies must sponsor this type of project so that it can exercise its active role in the society.

Firm Characteristics and Financial Performance of Quoted Commercial Banks in Kenya

The role of commercial banks in economic growth and development, income generation and job creation is crucial especially in developing countries. With the increasing trend of sudden corporate failures in both global and local context, shareholders and management are increasingly becoming more concerned with the factors that affect financial performance of firms. The study, therefore, sought to determine the effects of firm characteristics: the number of years in operation of the firm, the market share of the firm and board characteristics, on the financial performance of quoted commercial banks in Kenya. This study adopted the descriptive research design and was a survey of the eleven commercial banks listed on the Nairobi Stock exchange. The study used secondary data obtained from the companies audited financial statements and data recorded on a secondary data collection sheet and analyzed using the panel regression analysis. The study found out that an increase in market share and board characteristics will lead to an increase in financial performance of the quoted commercial banks in Kenya. Similarly, an increase in number of years in operation will lead to a decrease in financial performance of quoted commercial banks in Kenya. This implies that the banks improve their financial performance by increasing its market share and focusing on the board characteristics. The study recommends that managers need to analyze financial performance over time and establish ideal asset size, board characteristics, market share and develop relevant strategies to maximize productivity and improve performance of the quoted commercial banks in Kenya. Further studies should be done to investigate the effects of firm characteristics on the remaining commercial banks not quoted at the NSE and other sectors of the economy. Researchers, academicians and students should carry out studies to investigate possible firm characteristics and factors that affect financial performance of commercial banks in Kenya.

Commercial banks as monetary policy impetus conduits: Loans to non-financial organizations and the GDP

Subject. This article simulates the impact of commercial banks as conduits of impetus transmitted by monetary policy to the economy, on economic growth in various countries in 2000–2020. The key task of modeling is to identify the impact of variability in the volume of bank loans provided to non-financial organizations on GDP. Objectives. The article aims to contribute to the discussion on the role of commercial banks and bank loans to non-financial organizations in the implementation of monetary policy and the achievement of the goal of economic growth. Methods. For the study, I used a new mathematical apparatus that differs from the classical econometric approach. Results. The article proposes a model of the impact of bank loans to non-financial organizations on GDP, which helps determine two management scenarios: sustainable unidirectional (positive) impact of growth in indicators of bank lending to non-financial organizations on GDP for a certain period or periods; complete absence of control actions. Conclusions. The article concludes that different countries implement either the first management scenario or the second one to achieve the goals of economic growth.

Role of Commercial Banks in Financing SMEs: A case study of Oman

Oman is an oil-producing country and now it is trying to find other ways for generating further income. In the last few years, the Oman government has recognized the importance of SMEs in improving the national economy. Small and medium enterprise plays a key role in the growth and development of a country. This study covers and focused on the role of commercial banks in financing SMEs in Sultanate of Oman in Dhofar banks and Bank Muscat and barriers they face in financing SMEs. This study's findings show the role of Omani banks in providing financial facilities and government support in designing a good structure that enhances the importance of small and medium scale in national economies and provides encouragement and support to them. Each commercial bank should have a specific department responsible only for dealing with small and medium enterprises clients with appropriate methods that suit stated by the bank. Financial support should always be available for SMEs and applying and lending loan process must be easier and more appropriate for the individual.

The role of commercial banks and their operations in the modern economy

The role of commercial banks and their operations in the modern economy

К вопросу обеспечения доступности фондового рынка коммерческими банками

The need of economic entities in financial risks hedging, in investments retention or increase can be met through the expanding the financial instruments used, which is possible to be achieved by promoting the stock market availability. The commercial banks activities in the securities market are diverse and include the role of an issuer, an investor, and a professional participant in the securities market. The activities on the security trust management and implementing brokerage activities are of the greatest importance as in this case, a commercial bank implements the mediating role ensuring the stock market availability for investors. The paper evaluates the evolution of the stock market formation and functioning with regard to the influence of the existing financial instruments and needs of the financial market participants on the dynamics and peak of its development. The author analyzes special aspects of the financial institutes’ activity, specifies the important role of commercial banks in attracting and allocating investment resources. The paper contains the systematization of the external and internal limitations affecting the commercial bank’s financial policy. Despite the extensive list of the external and internal factors affecting the economic policy of a bank, the key role is assigned to the management policy, on which the investment conditions proposed by a bank to its customers depend. The author proposes a mechanism of combining the active-passive and active operations of a commercial bank involving the development of such an optimal financial product that would meet the interests of retail investors in buying the stock market financial products and the needs of issuers (borrowers) in investment resources. This mechanism will allow promoting the power of commercial banks as underwriters in securities market. The author recommends the improvement of a customer-oriented approach for commercial banks when developing financial products and services.

A new digital currency system

Aim: The aim of this paper is to describe the construction of a new system for digital currency governed by the central bank, Central Bank Digital Currency (CBDC). Although the system uses cryptography, it is a new alternative for crypto currency like the Bitcoin. Today there is a global discussion about the process of money creation by the commercial banks and the need for CBDC available for a broad public. There is almost no literature how such a system could be constructed. In this paper we fill this gap. The system we describe, uses modern cryptography that guarantees privacy on the one hand but that allows for traceability on the other hand. Also we consider the possibilities for new fintech initiatives and the new role of commercial banks.
 Research methods: The research method can be classified as design research since we present a high-level model of the system as a proof-of concept. So it proofs that such a system is feasible in principle. It is expected that the paper contributes to the discussion on CBDC systems.
 Conclusions: It is shown that it is indeed possible to design a CBDC system that is far more efficient than the well-known crypto currency systems. But the system uses one distributed system for transaction processing governed by the Central Bank or a trusted third party. This might be seen as a drawback but the system is performing only very elementary transactions that are easy to verify.
 Originality: The approach is new. Although existing cryptography techniques are used, the system as such is a completely new alternative for CBDC.
 Implications: The paper shows that a CBDC system is relatively easy to construct and so this paper could play a role in the transition to such a system in reality.

Conceptual Frameworks of the Development of Banking and Insurance Interaction in Modern Conditions

The purpose of the article is to reveal conceptual frameworks for further development of the banking and insurance interaction in order to ensure the growth of the value of banking and insurance business on account of the more effective use of their potentials and opportunities.It is noted in the article that banking and insurance interaction is manifested as the provision of insurance services through banking institutions – Banсassurance, the provision of banking services through insurance companies – Assurbanking, the provision of integrated services within financial conglomerates – Allfinanz.In the course of the research, it was determined that the banking channel for the sale of insurance services is the most efficient, and Bancassurance is a system of insurance services sale through the extensive banking network. The necessity and importance of the Bancassurance development, which is actively used in all developed countries, but differs in scale, methods, organizational forms and final financial results, is revealed. This is especially relevant in the context of reforming the regulatory bodies of the state financial market.Within the study, the advantages and disadvantages of Bancassurance and the prerequisites for its development are revealed. Particular attention is paid to the requirements to insurance companies in the process of the Bancassurance implementation. It is noted within the article that the interaction of banks and insurance companies can be carried out at different levels, from the level of the cooperation agreement, agency agreement, banking and insurance cooperation, to the level of the corporate control through the mechanism of mergers and acquisitions and financial supermarket.Within the study the conclusions are made that further development of banking and insurance interaction is conceptually aimed at increasing the role of commercial banks and the formation of “financial supermarkets”, in which each customer can meet the needs of bank services, financial consulting, and insurance. JEL classіfіcatіon: G21, G22