1. Why bank is unique financial intermediary?

 Banks can collect mess deposit

 Bank is highly regulated.
 Central Bank help commercial banks to implement monitoring policy.
 Banks help to credit creation.

2. Limitations of bank loan?

 Banks may require a good credit history for loan approval.
 Loan amounts may not cover all financial needs.
 Repayment schedules can be inflexible.
 Defaulting on loans can have severe consequences.
 Personal guarantees may be necessary for business loans.
 Loans may not be available for certain high-risk ventures.
 Documentation and paperwork requirements can be extensive.
 Regulatory changes can affect loan terms and availability.

3. Why bank face challenge in developing country?

 Limited access to banking services in remote areas.
 High levels of poverty and income inequality.
 Political and economic instability.
 Lack of financial literacy among the population.
 Insufficient infrastructure for banking operations.
 Weak regulatory and legal frameworks.
 Currency exchange rate volatility.
 Limited collateral for loans in the informal sector.
 Competition from informal and unregulated financial providers.
 Exposure to credit risk in an underdeveloped credit market.

4. Why bank share decease ?

=The decline in market share of banks is influenced by various factors, as discussed in the case of
financial services. Some experts argue that traditional banking may become less necessary as
financial markets become more efficient and large customers find alternative ways to obtain
funds. Government subsidies, excessive regulation, and changing customer demands have all
played a role in shaping the evolution of the banking industry. Therefore, the decline in market
share is not attributable to a single factor but a complex interplay of these factors.

5. Why bank is highly liquid ?

= Banks are highly liquid due to:
 The ability to quickly convert deposits into cash.
 Access to central bank reserves for immediate liquidity needs.
 A constant flow of customer deposits and withdrawals.
 Diversified investments that can be quickly liquidated.
 Short-term interbank lending and money market operations.
  Regulatory requirements to maintain sufficient liquid assets.

6. Why bank loan Is unique?

 It involves borrowing funds from a financial institution.
 It often requires collateral or a credit check.
 Interest rates and terms vary based on creditworthiness.
 Loans can be for various purposes, from personal to business.
 Repayment typically includes both principal and interest.
 Banks offer a wide range of loan products to suit different needs.
 They play a crucial role in stimulating economic growth and investment.
 Loan approval and terms are subject to regulatory oversight.

7. Trade of between liquidity and profitability?

 Liquidity refers to the ease with which an asset or investment can be converted into cash
without a significant loss of value. More liquid assets can be quickly sold or converted
into cash, providing financial flexibility and safety.

 Profitability relates to the potential return or earnings that an investment or business

can generate. Investments with higher profitability often come with greater risks and
may not be as readily convertible to cash.

8. Liquidity Management
 Maintain cash reserves and central bank reserves.
 Engage in interbank borrowing and lending.
 Use Asset-Liability Management (ALM) to match maturities.
 Conduct stress tests to assess resilience.
 Adhere to regulatory liquidity requirements.
 Develop contingency plans for liquidity crises.
 Analyze customer deposit behavior for insights.
 Diversify funding sources for stability.

9. Capital accuracy management?

 Regulatory standards dictate minimum capital requirements.
 Common Equity Tier 1 (CET1) capital is the highest quality.
 Risk-weighted assets factor in asset risk.
 Capital buffers provide loss-absorption capacity.
 Stress tests assess resilience to adverse scenarios.
 Banks can issue various capital instruments.
 Allocation considers risk in different activities.
 Capital plans outline capital maintenance strategies.
 Quality CET1 capital is crucial for stability.