магистрам темы

 

 

1.     The development of the financial industry

The financial sector development plays a huge role in economic development. It promotes economic growth through capital accumulation and technological progress by increasing the savings rate, mobilizing and pooling savings, producing information about investment, facilitating and encouraging the inflows of foreign capital, as well as optimizing the allocation of capital.

Countries with better-developed financial systems tend to grow faster over long periods of time, and a large body of evidence suggests that this effect is causal: financial development is not simply an outcome of economic growth; it contributes to this growth.

Additionally, it reduces poverty and inequality by broadening access to finance to the poor and vulnerable groups, facilitating risk management by reducing their vulnerability to shocks, and increasing investment and productivity that result in higher income generation.

Financial sector development can help with the growth of small and medium sized enterprises (SMEs) by providing them with access to finance. SMEs are typically labor intensive and create more jobs than do large firms. They play a major role in economic development particularly in emerging economies.
Financial sector development goes beyond just having financial intermediaries and infrastructures in place. It entails having robust policies for regulation and supervision of all the important entities. 

 

2. The 5 Biggest Russian Banks

The Russian banking system is top-heavy, largely state-controlled, and heavily regulated by the Russian Central Bank.1 The Russian state holds majority stakes in the top two banks, Sberbank (SBER) and VTB (VTBR), which together account for more than half of the Russian banking industry's assets.

After these two giants, the next three largest banks by assets are government-controlled Gazprombank; Promsvyazbank, which was nationalized in 2018 and turned into a lender to the Russian defense industry; and the fully state-owned Russian Agricultural Bank.

Sberbank's history stretches back to 1841, when Russia established a network of state-owned savings banks. It remains by far the largest Russian bank by market capitalization—₽5.5 trillion (rubles), as of July 2023. Sberbank's 107 million retail customers account for approximately half of Russia's deposits and credit card accounts. The Russian government owns a stake of just over 50% in Sberbank, which it acquired from the Russian Central Bank in 2020.

The second-largest Russian bank and another majority state-owned one, VTB was founded as Vneshtorgbank (Foreign Trade Bank) in 1990. The Russian government holds 92.2% of the bank's share capital, including 60.9% of its ordinary shares.

A subsidiary of Russian natural gas giant Gazprom (GAZP), Gazprombank is Russia's third-largest bank by assets. It was founded in 1990 to provide banking services to the energy industry.

Founded in 1995 by brothers Dmitry and Alexei Ananyev, who had been telecom technology entrepreneurs, Promsvyazbank became one of the fastest-growing Russian banks. The bank was recapitalized in 2018, with ownership assumed by the state to finance the defense sector and military activities.

Russian Agricultural Bank is a state-owned bank established in 2000. The bank specializes in agricultural financing, with over 5,400 agribusinesses financed in its 22-year existence.

3. Retail banking

Retail banking is banking that provides financial services to individual consumers rather than businesses. Retail banking is a way for individual consumers to manage their money, have access to credit, and deposit their money in a secure manner. Services offered by retail banks include checking and savings accounts, mortgages, personal loans, credit cards, and certificates of deposit (CDs)

Many financial services companies aim to be the one-stop-shop retail banking destination to their individual consumers. Consumers expect a range of basic services from retail banks, such as checking accounts, savings accounts, personal loans, lines of credit, mortgages, debit cards, credit cards, and CDs.

Most consumers utilize local branch banking services, which provide onsite customer service for all of a retail customer's banking needs. Through local branch locations, financial representatives provide customer service and financial advice. Financial representatives are also the lead contact for underwriting applications related to credit-approved products.

Retail banks are also an important source of credit for individuals. They offer consumers credit to purchase large-scale items such as homes and cars. This extension of credit can take the form of mortgages, auto loans, or credit cards. This extension of credit is an important facet of the economy as it provides liquidity to the everyday consumer, which helps the economy grow.

4. Types of Banks.

Types of Banks	What It Is	Key Services	Suitable for
Retail Banks	Banks that offer services to individuals	Bank accounts, loans, debit and credit cards, and ATMs.	Individuals and small businesses
Commercial Banks	Banks designed for commercial purposes	Loans, cash management, credit products, equipment lending, trade finance, commercial real estate, foreign exchange	Small and mid-size businesses
Investment Banks	Banks that manage investment portfolios	Stock trade, securities, and bonds management, corporate finance, merger & acquisition assistance, and asset management	Large corporations, and institutional investors
Universal Banks	Banks that offer a combination of retail, commercial, and investment banking services–all in one place	Checking and Savings Accounts,  Credit and Loan Facilities,  Brokerage Services Asset, Management and Investment Advisory, and Financial Analysis	Individuals and businesses seeking comprehensive financial services from one single bank
Credit Unions	Member-owned and non-profit financial institutions	Similar services to retail and commercial banks, but only to certain demographics	Individuals seeking affordability and local support
Private Banks	Banks offering personalized banking services	Financial planning, investment guidance, wealth management, credit services, lending	High-net-worth individuals
Savings and Loan Associations (S&Ls)	Banks specializing in making mortgage loans	Mortgages, refinance loans, and alternative home loans using deposited savings	Customers seeking a community-oriented banking experience for homebuying
Islamic Banks	Banks that operate in strict adherence to Islamic law.	Profit and Loss Sharing Ventures, Cost Plus Finance, Islamic Leasing, Islamic Bonds, and Islamic Insurance	Individuals and businesses seeking  financial institutions that comply with Islamic law
Green Banks	Banks that focus on funding renewable energy, energy efficiency, and other green initiatives, rather than maximizing profits.	Financing Renewable Energy Projects, Energy Efficiency Financing, Funding for Low-Carbon Technologies, Climate Resilience and Adaptation Projects, Mobilizing Private Investment, and Advisory Services	People and organizations need financial support to transition or create eco-conscious projects and technologies.
Challenger banks	New banks that challenge traditional banking models by offering innovative products and services	Savings accounts, investment accounts, mobile banking	Individuals and businesses seeking convenience and remote banking
Neobanks	Digital-only banks that operate entirely online with no physical branches	Multi-currency accounts, mobile banking	Individuals and businesses seeking innovative 100% banking options

 

5. How banks make business lending decisions.

A bank’s decision to give you funding will depend on the following areas:

Your profit and cashflow

The bank will want to know that you will be able to repay what you borrow and interest within the agreed timeframe. Therefore you'll need to provide historical (where this is relevant) and projected financial information that demonstrates profitability and cash generation. This information should support your loan application.

What security is available?

You'll need to pledge something as security for the loan, which is known as collateral.

Common forms of security include:

• Real estate
• Vehicles
• Equipment
• Inventory, structures and circumstances
• Accounts receivable (your trade debtors)

The bank may also ask you to provide a personal guarantee as additional security.

What will the loan be used for?

The bank will want to understand the market conditions that affect your business.

The bank's appetite to lend will vary from sector to sector depending on its particular risk policies.

If your business would not match their risk appetite you should approach other banks and alternative lenders.

Your personal credit assets

A bank can consider your personal finances using character and your property/assets to secure the loan (collateral).

If you have a poor personal credit history, the bank might think it’s possible your business could have similar problems.

Collateral

If the bank decides that your business doesn’t have adequate collateral to secure the loan, it may want your personal assets as collateral. As a minimum it may ask for a personal guarantee.

It's worth bearing in mind that if you fall short on only one criteria, your application may still be rejected. Therefore, it's important that you submit a clear and strong proposal to a bank or alternative lender who will likely look for the same information.

6. Types of Accounting

Accounting is the process of recording and measuring data which provides the financial as well as non-financial information about the enterprises.

 Financial Accounting involves the process of aggregation, compiling, and production of the financial information of the company in the form of financial statements used by the stakeholders of the company.

 Project Accounting is the accounting that is used by the company to track the progress of the different projects undergoing from the financial perspectives. It plays an integral part in project management.

Managerial Accounting mainly focuses on accumulating the information to be used for internal operational reporting, i.e., it is primarily for the internal working of the company. It is more detailed than the information given to the external users of the company.

Government Accounting mainly focuses on the financial administration of the Government’s activities for promoting welfare to the maximum level in the form of the various services given by the Government. 

Tax Accounting involves compliance with various tax-related statutes along with the tax planning with the aim of preparation of tax returns.

Cost Accounting is the accounting method that is used for capturing the various cost of production of the company by assessing these costs like input cost, fixed cost.