The reserve fund of a commercial bank

Available in the reserve ensures the stability of a commercial bank, it reduces the likelihood of bankruptcy. The reserve fund created by a commercial bank in the manner specified meeting of shareholders, and its size is set, usually at 50% of the authorized capital. It is formed by contributions from revenue. In addition to the reserve fund of commercial banks created special funds to cover the losses of active operations and for industrial and social development of the bank, their formation at the expense of profits. Profit is a resource for internal origin. It exists in the form of residual profit after tax and contributions to the funds of the bank. Borrowed funds - a collection of resources on current, deposit and other accounts of bank customers (businesses and individuals), the accounts of public organizations and foundations to be placed in an asset with a view to profit or to ensure the liquidity of the bank. Borrowed funds form the bulk of the resources used to perform active operations of banks. Category: Management Operations Commercial Bank