ALL >> Investing---Finance >> View Article
Wholesale Banking: All That You Need To Know
Total Articles: 1170
Banking is a diverse section of any financial system of the world. While most individuals are concerned with personal banking features only, many aspects mainly concern larger organizations. Unlike retail banking that mainly deals with smaller businesses and individuals, wholesale banking is primarily needed by larger organizations and by other banks.
What is wholesale banking?
Any financial transactions that occur between merchant banks and other financial institutions is known as wholesale banking. This kind of banking is mainly limited to very large organizations and equities. This form of corporate banking comes with added perks, which are not offered in case of retail banking. These perks include currency conversion, transactions in case of large-scale trade, financing for working capital and many others.
Aspects of wholesale banking
Wholesale banking is concerned with the lending and borrowing of money between two major, large-scale entities or organizations. These organizations may be government-controlled bodies, funds allocated for pension and other institutions with enough assets to be considered a large-scale business.
A transaction may also be referred to as wholesale banking if the lender and the borrower are two banks. This kind of transaction usually takes place in the interbank market and involves the exchange of very high sums of money.
Most ordinary banks also offer the wholesale banking services. These organizations act as merchant banks in case of such a transaction. This means that you can conduct corporate banking with the same bank under which you may have your personal account.
Why wholesale banking is beneficial?
Since in such corporate banking, the transaction revolves around much larger sums of money than in retail banking, there are a few benefits to wholesale banking. Due to the higher amount of transaction, most banks offer discounts in the form of lower interest rates and reduced transaction fees on a per rupee basis.
Aside from the added advantages, wholesale banking is vital for proper functioning of a larger business. For instance, a company operates 20 different branches across India and each of the branch needs to keep a reserve amount of Rs.10 Lacs. This means that in total the branches would need to maintain reserves of Rs.2 Crore. Maintaining and managing such cash using retail banking would be too difficult. So, to streamline the procedure, wholesale banking becomes essential.
Through such corporate options, the company has to maintain only one account through which all of the company’s transactions can go through. So, if one has a big business and are looking for a simpler procedure to handle the financials, try out wholesale banking.
Author Bio:- Neha Sharma is a finance student who loves to write in her free time. She has spent considerable time researching about the EMI calculator and why is it important to calculate the EMI. Through her work, she provides valuable information on wholesale banking.
Investing / Finance Articles1. No Credit Check Faxless Payday Loans
2. Understanding Corporate Debt Restructuring In India
Author: Aniket Vichare
3. Tips To Know Before Applying For A Personal Loan By Srg
Author: srg housing
4. The Ultimate Guide To Cryptocurrency Wallet
5. Buy And Sell Mutual Fund Online | Moneytreesolution
6. Can I Get A Loan Despite Bad Credit Unemployment?
7. Advantages Of Binance Crypto Exchange
8. Payday Loans For People On Benefits Direct Lenders - 100% Online Decision
Author: Hamish Rutherford
9. Best Mcx Commodity Tips Provider In India
10. Why Open An Nri Account?
Author: Samantha Kennedy
11. Commercial Mortgage Loan
Author: Loansa Assit
12. Why Perform A Fundamental Analysis Of A Company?
Author: Aastha Kapoor
13. Open Online Trading Account With The Lowest Brokerage Charges
Author: Krutika Sharma
14. Avail Reliable Tax Return Online Australia Services To Get The Job Done Like Never Before
15. Get Yourself Best Sip Plans For Long Term
Author: Jignesh Shah