Commercial banks.

Role and place in credit system.

Commercial banks treat special category of the business enterprises which have received the name of financial intermediaries. They involve the capitals, savings of the population and other free money which are liberating in the course of economic activity, and provide them in temporary use to other economic agents who need the additional capital. Financial intermediaries carry out, thus, important economic function, providing society the mechanism of inter branch and interregional redistribution of the monetary capital.

Value of commercial banks in modern credit systems is so great that is necessary to stop especially on functions of these institutes. The term "commercial bank" arose at early stages of development of banking when banks served mainly trade, goods exchange operations and payments. Dealers (from here and the name "commercial bank") were the main clientele, but at this stage, the term "commercial" in the name of bank lost originally sense. It designates "business" character of bank, its orientation on service of all types of economic agents irrespective of a sort of their activity.

Today the commercial bank is capable to offer the client to 200 types of various bank products and services. The wide diversification of operations allows banks to keep clients and to remain profitable even at very adverse economic conditions. Not casually in all countries with market economy they remain the main operational link of credit system. Speaking about modern commercial banks, it is necessary to emphasize that as well as other links of a banking system, these establishments constantly evolve. Forms of operations, monitoring systems and managements change. The field of activity which covers the whole world thanks to formation of the international markets of the loan capital sharply extended. And though in some areas they lose positions under the pressure of competitors, they find amazing ability to adapt to changing conditions of the credit market. There is certain base "set" without which the bank can't normally function. Such operations of bank treat:

* reception of deposits;

* implementation of monetary payments and calculations;

* delivery of the credits.

Systematic performance of the specified functions also creates that base on which work of banks is based. And though performance of each type of operations it is concentrated in special departments of bank and it is carried out by special "team" of employees, they the closest intertwine in a way among themselves. So banks I possess ability to create instrument of payment which are used in an economy for the organization of the commodity address and calculation. It is a question not of release of banknotes which became now NBK monopoly about opening and maintaining the check and other accounts forming a basis of a non-cash turn. The steady and dynamic economy can't exist and develop without well debugged system of monetary calculations. From here big economic value of banks as organizers of these calculations. Creation of means of payment is closely connected with depositary function and function of crediting of bank clients. Considerable part of deposits poste restante, i.e. those types of current accounts against which can be drawn checks, arise spontaneously, in the course of issue of bank loans.

The deposit can arise two ways: as a result of introduction to clients of cash in bank or in the course of bank crediting. And these operations by various image will be reflected in size of monetary weight in the country. Ability of commercial banks to increase or reduce deposits widely are used by the central banks which through system of obligatory reserves operate dynamics of the credit. In the course of the activity the bank not only creates, but also destroys a part of money. It occurs, first at removal by the client of cash from the bank account and, secondly at credit repayment by write-off of money from the deposit account. The similar result will turn out and at sale by banks of securities - on accounts of investors the sum of deposits will decrease and the mass of means of payment in an economy will be reduced.

The second extensive functional field of activity of banks - mediation in the credit. Commercial banks, carry out a role the intermediary between economic units and the sectors accumulating temporarily free money, and those participants of an economic turn who temporarily need the additional capital.

As financial intermediaries commercial banks compete to other types of credit institutions. They I provide to owners of spare capitals a convenient form of storage of money in the form of various deposits that provides safety of money and satisfies need of the client for liquidity. Such form of storage of money is more preferable to many clients, than an investment of money in an action or the bond.

The bank credit - too very convenient and in many cases an irreplaceable form of financial services which allows to consider flexibly needs of the specific borrower and to adapt for them conditions of obtaining the loan. Besides performance of base functions banks offer clients a set of other financial services, for example, banks carry out any confidential operations for corporations and the individuals connected with transfer of assets in management to bank on a confidential basis, purchase for clients of securities management of real estate, performance of guarantee functions on bonded releases. As any other capitalist enterprise working in the conditions of the market the bank is subject to risk of losses and bankruptcies. Maintenance of an optimum ratio between profitability and risk makes one of the main and most complex problems. managements of bank.

By the law «About banks and bank activity» it is defined that banks of the second level are created in the form of joint-stock companies without the right of a share issue to bearer. Banks can be formed on the basis of any form of ownership, except for the state banks which are created only on the basis of state ownership. Legal entities and individuals - not residents of Kazakhstan taking into account features of creation of affiliated banks - not residents RK provided by the law can be founders and shareholders of banks. Attraction of money from legal entities and individuals, opening and introduction of correspondent accounts of banks and not banking financial institutions, and also metal accounts of banks is authorized to banks of the second level; implementation of cash, translated, registration, loan, clearing, pawn operations; financing of capital investments; carrying out operations with foreign currency is also authorized.

For January 1, 1997 in RK 130 functioning banks more than with 1000 branches are registered. From them on a way of formation of an authorized capital: joint-stock banks - 78, private - 31, 6 affiliated, state and joint-stock and commercial - 3 banks, 1 interstate and 1 commercial. From total number of banks 14 are banks with foreign participation.

Speaking to security of the market with bank services, it is possible to allocate two main problems, characteristic for the Kazakhstan financial market:

The existing financial potential of the majority of banks remains very low. At 44,6 % (130) banks the registered authorized capital is in limits to 20 million tenges, and actually in the same limits have 53,1 %. It is the biggest group of banks. And it is quite natural that the banks being in this group, can't potentially provide to clientele full range of services, turning on from itself both ordinary investors, and solid clients.

Other problem of providing bank services in the Kazakhstan market is a high skontsentrirovannost of banks in the city of Almaty (66 banks). In other areas mainly work from 1 to 11 banking institutions. And in the North Kazakhstan area of the such isn't available at all. And after all force of influence of a banking system on economic processes is conclusive, influencing low economic development of these regions, decrease in probable scales of business, small and medium business. Absolutely prevailing type of bank of the Republic is without filial bank that confirms that Kazakhstan can't approach to that situation when the banking system will characterize not so much number of small banks without branches and offices, how many a small amount large reliable with a large number of territorial divisions. On 130 Kazakhstan banks it is the share 1021 branches, where 234 branches of agriculture bank and 296 National (of 16 million Kazakhstan citizens on a face obviously insufficiency security bank services).

[http://www.ncbi.nlm.nih.gov/pubmed/17563992]