ASSETS OF COMMERCIAL BANKS

They can be categorized as follows : 1. CASH BALANCES : Every bank holds cash balances to meet its customers requests for withdrawal

These balances are held with the bank itself,

with other banks and with the RBI

2. MONEY AT CALL AND SHORT NOTICE : These are short term loans ( between 1 day to 15 days ) made in the money market. The loans are repayable at the insistence of either the borrowers demand or the lenders demand

3. DISCOUNTING / PURCHASING OF BILLS OF EXCHANGE Banks provide credit to businessmen against discounting of bills. The bill finance is repayable either demand or after a period not exceeding 90 days, whichever is EARLIER. Thus, they can be converted into cash in less than 3 months.

4. INVESTMENTS : The investments made by a bank form the major part of its assets. The investments of a commercial bank can be categorized as : a) Investment in SLR securities.

b)

Investment in non- SLR securities.

5. LOANS AND ADVANCES : This is the most important item in the banks asset column. These include the following:
1.
2. 3. 4.

Cash credit Over draft Demand loans Term loans