Assets of Bank

The assets of banking companies are quite different from other companies and balance sheet of the bank is also unlike other companies which are into manufacturing or trading as banks are into service sector. Given below are the assets of bank which appear in the balance sheet –

  1. Cash in Hand and with other banks – It represents the cash balance which is available and which can be used for various purposes like giving loans, meeting day to day expenses and so on. Apart from its own balance banks also maintain cash with other banks which will appear on the asset side of the balance sheet.
  2. Cash with Central Bank – Banks have to maintain a portion of their cash with the central bank which is known as cash reserve ratio and in the balance sheet it will appear on the asset side.
  3. Loans and Advances – Banking involves giving loans and advances to customers, loans and advances can be in the form of term loans, cash credit, overdraft, auto loan, housing advances, credit card loan, Bills and securities discounted and so on. Since these advances will be repaid by the customer or companies in future they are treated as asset for the banks.
  4. Investments – Banking companies also do investments in various assets classes like real estate, equity markets, debt markets, gold securities and so on and theses all are shown under the head investments in the asset side of the balance sheet.
  5. Other or physical Assets – Apart from above banks also have various physical assets like furniture and fixtures, land, building, vehicles for employees etc.., which are used for running of the organization and these are grouped into balance sheet as other assets.

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