LUCRĂRI ŞTIINŢIFICE, SERIA I, VOL.

XX (3)

THE EVOLUTION OF BANK DEPOSITS OFFERED BY THE BANKING

SYSTEM TO CUSTOMS FROM THE WEST REGION

MEILĂ ELENA DANIELA1, TOBEȘ FLORINA1, SÎRBULESCU CLAUDIA *1 ,

PÎRVULESCU LUMINIȚA1
1
Banat’s University of Agricultural Sciences and Veterinary Medicine "King Michael I of
Romania" from Timisoara, Faculty of Management and Rural Tourism, Romania
*Corresponding author’s e-mail: sirbulescuclaudia@yahoo.com

Abstract. The paper presents an evolution analysis of the clients’ deposits of banks from
West Region. Scientific research has shown that saving influences the development of the
bank's activity, by guiding the development of certain activities, that can stimulate new
consumption and saving behaviors at the society’s level. The methods used by the authors
of the article consisted in data collection, analysis, graphical representation, classification.
An aspect that emerges from the analysis of the savings products available in the banks'
portfolio is the very low profitability that money generates from bank deposits and which is
recommended to those who want to save their money or wants to have an emergency fund.

Keywords: bank, bank deposits, savings

INTRODUCTION

Saving is the process of retaining revenue from what remains after consumption.
The difference between income and consumption represents the economies [7].
The purpose of the article is to provide an image regarding the deposits of non-
governmental clients that are growing as a result of increasing the confidence in banks.
The general objective of the paper is the analyze of the deposits of noncustomers of
the bank from the West Region.
One of the main functions of banks is the constitution and use of bank deposits. The
creation of bank deposits represents one of the most important business lines for banks,
because deposits are used for lending and other investments [3].
The most attractive savings product of the Romanians continues to remain the bank
deposit. This is the amount of money deposited at the bank, for a period of time, for which
any bank pays the customer interest [12].
The main purpose of the bank deposit is to avoid savings depreciation, which
requires that the interest rate on bank deposits to be higher than the inflation rate.
Banks offer a wide range of deposits, which can be classified in terms of duration,
saving currency and interest refund [1, 2, 3].
Depending on the type of interest, deposits can be: with variable interest (the bank
may change the interest rate during the deposit period, taking into account market
developments); with fixed interest (a fixed interest rate is ensured for the entire duration of
the deposit) [5, 10].
If we take in consideration the payment method of the interest, deposits can be:
with capitalization (interest is added periodically to the amount deposited initially) and
without capitalization (the interest is constituted monthly in a current account and gives the
holder access to it).
Bank deposits can be at sight, when the amounts can be withdrawn at any time or
at term when the amounts can be withdrawn from the deposit only at a fixed date (expiry
of the terms for which they were set up). In the case of deposits at sight, banks pay a lower
interest rate than those at term, and for the storage of valuable objects they charge
commission [6, 9].

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The criterion of a person who decides to keep their savings in a deposit is the level
of the interest rate. The attractiveness of a savings product results precisely from the
annual maximum value of this interest [4, 7, 8].
Banks receive money in the form of deposits from customer and pay interest on
deposited amounts. The bank has to create income to pay interest to depositors, to make
profit for its shareholders and for its own development.
Keeping savings in a warehouse has advantages but also disadvantages. Among the
advantages: [12, 13]
- if the bank goes bankrupt, the depositor recovers the money. The National
Guarantee Fund is the institution that guarantees the depositor up to 100,000 euros and
applies to all deposits made by one person at a single bank.
- are accessible to individuals, and if the deposit is constituted through the Internet
banking service, banks can offer a bonus on interest compared to the standard one.
- interest bonuses are granted to certain social categories (students and pensioners).
As disadvantages:
- if the money is withdrawn before maturity, the accumulated interest is lost.
- interest rates on deposits are taxed 16%, savings in euros are subject to currency
risk, and those in lei, to inflationary risk (http://www.bankingnews.ro)

MATERIALS AND METHODS

The research methodology used by the authors of the paper is based on a rich
bibliography from various sources which consists of the collection of data from the
literature and includes books, articles and papers supplemented by annual reports, other
publications and statistical data provided by The National Bank of Romania. The data
collected through the documentation was analyzed, processed and represented graphically,
drawing the conclusions, to give an overview of the changes of the clients’ deposits from
the West Region.

RESEARCH RESULTS

Saving depends mainly on income. People tend to save more as their income
grows.
Individuals who have managed to save satisfactory amounts can access diversified
financial alternatives and gains.
The counties where the population and the companies save more, have also
employed the highest credits, in terms of the number of active individuals and active legal
entities, according to the NBR [11].
In table 1 we presented the structure of the deposits of clients from the West
Region and from the analysis of the data we found the following:
• availabilities at sight in lei in the West Region increased by 43.5% (from 3,793.2
million lei in 2014 to 6,721.0 million lei in 2017);
• the sightseeing availabilities in lei by counties also recorded an increasing trend:
- in Arad County, the growth was 45.6% in the analyzed period (from 3,793.2
million lei in 2014 to 6,721.0 million lei in 2017); the sight deposits in lei of population
households (Figure 1) increased by over 50% in the analyzed period, rising from 321.9
million lei in 2014 to 758.5 million lei in 2017.
- in Caraș Severin County (figure 2) the increase was 30.3% (from 244.4 million lei
in 2014 to 414.8 million lei in 2017); the sight deposits in lei of population households
(Figure 2) doubled, rising from 140.8 million lei in 2014 to 275.1 million lei in 2017).

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- in Hunedoara, the growth was 47.3% (from 512.1 million lei in 2014 to 972.4
million lei in 2017); the sight deposits in lei of population households (Figure 3) increased
by over 50% in the analyzed period, rising from 251.9 million lei in 2014 to 567.7 million
lei in 2017.
- the increase in Timiș (figure 4) was 42.1% (by 1628.4 million lei, from 2.241.6
million lei in 2014 to 3.870.3 million lei in 2017); the sightseeing availabilities in lei of
population households increased with 28.12% and the sightseeing availabilities in lei of
households (Figure 4) increased with 57.2% in the analyzed period.
Table 1.
Availabilities at sight in lei (lei million)
Year Arad Caraș Hunedoara Timiș West Romania
Severin Region
2014 795.1 244.4 512.1 2241.6 3793.2 55597.6
2015 989.7 279.1 664.1 2900.3 4833.2 72332.8
2016 1264.1 327.7 794.2 3516.2 5902.2 88234.0
2017 1463.5 414.8 972.4 3870.3 6721.0 99918.0
Source: http://www.bnr.ro [11]

Non-financial corporations Non-financial corporations

800 758,5
Households 758,5 300 Households
700 Other institutional sectors Other institutional sectors 275,1
623
640,2 250
600
541,4
million lei

500 586,1 200 200,2

million lei

440,3 140,8 155,5

400 150
406 112,7
300 112,7 120,5
321,9 100
200 94,6
50 14,9
100 9 10,9
42,2 64,8 19,2
32,8 0
0
2014 2015 2016 2017 2014 2015 2016 2017
years years

Figure 1. Evolution of the sight deposits Figure 2. The evolution of the sight
in lei in Arad County deposits in lei in Caraș Severin County
Non-financial corporations Non-financial corporations
600 Households 2500 Households
567,7
Other institutional sectors Other institutional sectors
2026,5
500
2000 1998,7
444,4
400 1854,7 1747,4
miilion lei

million lei

307,2 355,5 1500

251,9 308,5 1436,5 1390,6
300
323
1000
200 233 962,5
747,9
100 500
33,5 41,3 49,2 57,1 83,1 99,1
27,2 124,2
0
0
2014 2015 2016 2017
2014 2015 years 2016 2017
years

Figure 3. The evolution of the sight Figure 4. The evolution of the sight
deposits in lei in Hunedoara County deposits in lei in Timiș County

The situation of foreign currency assets in the period 2014-2017 (Table 2) is as

follows:
- the foreign currency deposits of households in Arad County (Figure 4) increased
during the analyzed period from 181.0 million lei in 2014 to 461.4 million lei in 2017;
- in Caraș Severin County of, the foreign currency deposits of households (Figure
4) increased 2.5 times between 2014 and 2017, from 74.0 million lei in 2014 to 190.3
million lei in 2017;

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- in Hunedoara County, the foreign currency deposits of households rose by 152

million lei (Figure 3) in the analyzed period, from 116.3 million lei in 2014 to 268.3
million lei in 2017.
- growth in Timiș (figure 4) was about 2 times in absolute terms (by 1232, 3 million
lei, from 1,341.7 million lei in 2014 to 2,574.0 million lei in 2017); households' foreign
currency availability (Figure 4) increased with more than 50% in the analyzed period.
- according to the data published by the National Bank of Romania (NBR), the
deposits of the total foreign currency deposits of population from Romania recorded a
growth almost twice in absolute terms, from 26.103,2 million lei in 2014 to 51,835.0
million lei in 2017;
- the total foreign currency deposits at the Western Region increased with 47% in
2017 compared to 2014.
Table 2.
Foreign currency deposits (lei million)
Year Arad Caraș Hunedoara Timiș West Romania
Severin Region
2014 451.7 105.9 204.7 1341.7 2104.0 26103.2
2015 515.0 137.5 235.1 1727.0 2614.6 34747.1
2016 776.4 180.2 292.8 2103.8 3353.2 41122.5
2017 792.2 230.8 399.6 2574.0 3996.6 51835.0
Source: http://www.bnr.ro [11]

Other institutional sectors 10,9 13,6 Other institutional sectors

800 Households 250 2,2
Households
700 Non-financial corporations Non-financial corporations 1
360,7 200
600 461,4
7,6 10,1 1,5
500
150 190,3
1,3
400 181 247,9
142,6
300 100 104,2
404,9 74
200 317,2
263,1 256,9
50
100 38,3
30,6 31,9 36,6
0
2014 2015 2016 2017 0
2014 2015 2016 2017

Figure 5. The evolution of foreign Figure 6. The evolution of foreign

currency deposits in Arad County currency deposits in Caraș Severin
County
Other institutional sectors 7,7 Other institutional sectors
400 Households 2500 Households 47,1
54,5
Non-financial corporations Non-financial corporations
350 4,3
2000 29,2
300
3,8 268,3 28,8 1151,2
250 2,9 1147,1
1500
194,2 850,2
200
152,3 570,3
150 116,3 1000

100 1011,7
123,6 500 742,6 847,6 902,1
50 85,5 78,9 94,3

0 0
2014 2015 2016 2017 2014 2015 2016 2017

Figure 7. Evolution of foreign currency Figure 8. The evolution of foreign

deposits in Hunedoara County currency deposits in Timiș County
Savings are essential for economic growth. The higher the saving rate is, the more
funds are available to the company for investment and thus to the increase in production
and incomes.
Savings on Romanians have a pronounced seasonality: it always increases in the
first half of the year and falls in the second semester.

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On the Romanian banking market in early 2018, only six banks offered a positive
interest on deposits.
From the first 10 large banks in Romania, only 4 banks currently offer over 1%
interest on deposits in ROL per one year. The highest interest rates reach 1.55% but given
the inflation rate and the bank fees in one year, the money from bank of a Romanian is
worth less than the amount originally deposited [12].
From 2013 until the middle of 2017, the average interest rate on deposits was
higher than the level of the price increase (0.85% to 0.85% in June 2017), after which the
money deposited had the power to lose and the rhythm at which this phenomenon has
advanced has increased.
The NBR raised the key interest rate at the beginning of 2018 to 2%, and the
central bank's interest on bank deposits from NBR at 1%. Under these conditions, the
interest rates on the population's savings were further decreased, the last average on the
system being 0.90%, according to NBR data [14, 15].

CONCLUSIONS

Given that the foundation of the banking system is to attract liquidities from the
population, in order to provide them in the form of credits, in order to obtain profit, saving
is a particularly important phenomenon.
Customers' needs are different. Some want to put money aside to enjoy the comfort
of additional financial protection, for unexpected situations, others because they want to
achieve projects or dreams.
Those who make economies usually have higher education, average or above
average income and an average age of 45-50 years. But more and more young people are
aware of the importance of saving, and many of them choose to manage their online
savings on their laptop, tablet or mobile.

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