Bank Balance Sheet

A balance sheet of a bank shows all financial operations conducted by a bank for a certain period of time. It reveals the borrowed funds by them, their own funds, their sources, their placements in credit and other transactions.

It is recorded in the two ways. In the left part (asset) all assets are reflected and in the right (passive) – liabilities and capital of the bank are positioned. An asset is anything that can be old whereas a liability is an obligation of the financial institution that must be eventually paid back. The owner’s equity in a bank is often referred to as bank capital, which is the remaining amount when all assets have been sold and all liabilities have been paid. The relationship of all balance sheet components can be simply described by the following equation.

Bank Assets = Bank Liabilities + Bank Capital

Assets earn revenue and include:

-Cash in hand;

-Funds on correspondent accounts;

-Funds in reserve funds of the bank;

-Granted loans to legal entities and individuals; (client loan portfolio)

-Interbank loans granted;

-Government bonds;

-Commercial securities;

Depending on the nature of the sources of funds, all liabilities differ in terms of their duration and cost. The main sources of funds as a rule, are deposits of individuals and legal entities, and in addition, funds of central (national) banks and loans obtained from other commercial banks.


-Funds of banks and other credit institutions;

-Clients accounts, including household deposits;

– The promissory notes issued by the bank;

By using liabilities the owners of banks can leverage their capital to earn much more value than would otherwise be possible using only the bank’s capital.

Also, Central banks regulate bank liabilities by setting mandatory reserve requirements from attracted deposits or by imposing administrative restrictions or incentives.

Assets and liabilities are further distinguished as being either current or long-term. Current assets are assets expected to be sold or otherwise converted to cash within 1 year; otherwise, the assets are long-term. Current liabilities are expected to be paid within 1 year; otherwise, the liabilities are long-term. Current assets and current liabilities are important in assessing liquidity of bank. The deduction of Current assets from Current liabilities gives us a working capital. It is a measure of liquidity. An excess in Working capital a bank is able to meet its short- term liabilities

7 Things to Consider When Applying for a Payday Loan

If you are going through tough circumstances, payday loans may sound a tempting option to you. But if you are not an experienced person, we suggest that you consider this option after a lot of thinking. Since these loans feature a very high interest rate, they shouldn’t be taken unless you have no other option. Below are 7 tips that may help you make an informed decision.

Financial charges

The amount of loan you will get is a lot lower than what is written on the check. The reason is that finance charges are deducted from the amount, so you will need to write a check plus these charges. Not doing so will result in a higher rate of financial charges that you will have to pay. Most people get into even bigger trouble when they fail to pay the principal amount along with interest. So, make sure you know how much you are getting and how much you will need to pay back down the road.

Paying back

If you don’t have enough funds in your account to pay back the loan, you may try other options. For instance, you may renew the loan amount or consider taking out another payday loan. But keep in mind that this new loan will have its own financial charges and extra fees. And the extra fees are actually incur because of late payment of the amount of loan.

State Regulations

In each state, regulations are different for payday loans. Usually, the term limit is not more than 30 days. The problem is that lenders often issue loans that feature a longer term limit. In this case, you are at the lender’s mercy, which is a situation you may not be willing to go through.

Cash crunches

As said earlier, the purpose of a payday loan is to deal with a temporary financial crisis, and we have to pay back the loan as soon as we are out of the financial trouble to avoid high interest and fees.

So, it is not a good idea to be tempted by the “roll over” trend or you may have to pay a huge sum at the end.

Financial position

Usually, these loans are for borrowers with lower incomes as they can’t afford to borrow from other sources. Here, it is important to keep in mind that lenders don’t usually take into account the financial position of those who are applying for the loan. So, you have to think harder before opting for this option.

Automatic rollover

You need to be aware that there are some loan sites that tend to rollover the loan amount automatically. And then there are sites that have some contractual agreements that state that you, the borrower, do not have any right to file for bankruptcy or file a lawsuit against the lender.


A great characteristic of payday loans is that they are easy to get, meaning the approval process is quite easier than other types of loans. So, most borrowers find them quite tempting, but you should be careful and only opt for this option if you have no other choice left.

You may say that opting for a payday loan is a good idea to deal with a temporary financial crisis, but a hasty decision may get you in a bigger trouble. If you don’t be careful enough, you may end up in a vicious circle of debt. Therefore, it’s better to pay back the loan as soon as you get your hands on some extra cash. Hopefully, keeping these tips in mind, you will take this decision.

Guide to Educational Loans: Bank Versus Non-Banking Financial Corporation (NBFC)

Quality Education is always worth our time, effort and importantly investment. Important decisions like this requires a thorough run through of options so that you are well informed of the pros and cons of your decision. The choice between Banking and Nonbanking corporations are commonly debated among the public either because of misinformation or lack of information. This article will aid to be a quick guide before you decide on who to go to for educational loans.

The key difference between bank and a NBFC:

Understanding the undergirding difference between the two may settle a lot of shadows for us.



Banks are overseen by the Reserve Bank of India

These corporations are regulated by the Companies Act 1956

They are entitled to be part of your payment process.

They cannot accept or issue deposits, drafts or cheques

However, the commonality between them is that they both can offer loans! Now the key difference being established, the services provided by each can be compared.

Loan Eligibility:

NBFCs have the longer rope in sanctioning your loan compared to the banks. NBFC determines loan eligibility based on your repayment capacity, credit score etc. While banks on the other hand makes you eligible based on your collateral, say home value. Bank loans exclude cost involved in stamp duty and registration procedures, while NBFC will craft plans to include these costs within your loan.

The paperwork hassle:

Banks have stringent and thorough process with paperwork, NBFC on the other hand have been able to achieve the same end through relaxed paperwork process. You may want to look out for both these options when choosing an educational loan.

Credit Score friendly:

Banks and NBFC favor loans to people with high credit score, however, in comparison to the bank, NBFC is friendlier to people with low credit score. You could choose what best aids your credit score.

Customized services:

If caught up with the busy schedules while looking out for educational loans, you may want to consider accessibility to information and the time taken to access services from the lenders. NBFC will come handy for busy schedules, as they provided customized services and assistance in terms of visa counselling, counseling, door step services etc. Banks on the other hand do not owe you that benefit.

Processing time:

Time is the most essential factor is any case. Delays and uncertainties can be frustrating and anxiety inducing. The loan approval process is shorter with NBFC compared to public sector banks, unless you have a favored relationship with your branch manager by being a long-term customer. Incases otherwise, NBFC save you from sweating in the waiting time.