What are the passive operations of the bank

Accumulation of funds in the bank accounts is carried out by carrying out passive operations. They are designed to provide the credit organization with the resources it needs to finance its activities and active work in the market of services.

The essence of passive operations


A credit institution performs passive operations in order to increase the resource base. Due to share premium and profit from doing business, own resources are formed. They are spent to cover priority and current expenses, the creation of reserves for possible losses, the acquisition of long-term assets.
Due to the deposits attracted from the population and the receipt of credits and loans from other organizations, borrowed resources are increased. They are used for active operations, and, first of all, lending. Since all borrowed resources are paid for a bank, they can be loaned to bank customers only at a higher interest rate.
The purpose and meaning of passive operations is:
- achievement of an optimal ratio between own and borrowed resources;
- attraction of borrowed resources at the lowest possible price;
- elimination of cash gaps in work.

Types of liabilities of credit institutions


Passive operations can be divided into 2 types: deposit and non-deposit. Deposit operations are called to attract temporarily free funds of the population and legal entities and place them on deposits: either on demand or for a period specified in the contract. Deposits and deposits make up a significant part of the liabilities of many banks.
Today, in the product lines of domestic banks you can find deposits with a variety of conditions. Deposits differ in terms of time, interest accrual method, the ability to replenish a deposit or withdraw a part of it, as well as on the availability of additional bonuses (for example, free services or gifts). Depositors who have been cooperating with a commercial bank for a long time often receive discounts for carrying out any active operations, such as paying bills or transferring funds.
Non-deposit operations are usually attributed to:
- primary issue of securities: large commercial banks often resort to issuing their own shares to cover the costs of large-scale projects, and they issue both ordinary and preferred shares;
- obtaining loans and credits from other legal entities - interbank loans and loans from the Bank of Russia are a serious source for filling the resource gap for many banks;
- formation or increase of funds at the expense of the bank's profit - these funds are intended to cover losses on loans, impaired securities, as well as to compensate for other large losses.