They are predominantly public or private sector
establishments. Things to consider are licensing, funding and identifying a
niche.
The next step is what type of bank Are you interested in
establishing. Private individuals should consider microfinance banking and community
banking. Microfinance banks require low startup unlike commercial or retail
banks.
Types
of Banks
There are different types of banks that serve different
purposes. The different categorizes focus on providing specialized services to
their immediate community.
Their operational requirements are structure against the
purpose and guideline of their establishment. Common types of banks are retail
banks, commercial banks, credit unions and investment banks.
We have the central bank, mutual banks, online banks and
savings and lo banks.
Central
Bank
The central bank statutory duty is to manage the economy.
Every country has a central bank that performs this function. They also have
the registration and supervisory roles of banks in the country.
Credit
Union
Credit unions are predominantly owned by customers. They
are non-profit organizations that offer commercial bank services to members.
The members are usually localized and share identical characteristics or
occupations.
Commercial
Banking
Commercial banks offer savings and checking accounts to
customers. They are the most common type of bank in the financial system. Other
functions include loans, lines of credit and opening domiciliary accounts.
Retail
Banks
Retail banks are the most popular type of banking that
offer same services as commercial banks. They attend to the general public and
provide debit/credit cards, savings and checking account.
How to Start a Bank in India
How to Start a Bank in India
Investment
Bank
Investment banks work predominantly in the financial
markets. They provide financial assistance to retail/ commercial banks
including companies.
Online
Banks
Online banks have no physical location and works entirely
online. All transactions are carried out online such as payments, purchase and
checking services.
Community
Banks; Community banks are local depository and lending
establishments.
Public
Bank Products
Public bank products include corporate banking services,
insurance and finance. They provide mortgage facilities, investment banking and
private equity management.
Other services are assets management, saving security,
credit card issuance and wealth management.
Private
Sector Banking
Private sector banks provide payment solutions, wealth
management, personal loans and investment banking. Other services are mortgage
loans, consumer banking. Others are corporate services, insurance and private
services.
Capitalization
The type of bank requires specific sums deposited to
regulatory banks and registration fees. Commercial banks require about $10
million to $20 million USD.
Small community banks and microfinance banks could
capitalize with less than $1 million USD. There are many ways to secure funding
subject to central banks recommendations. You could use venture capitalists,
angel investors, core investors and crowdfunding.
Management
Team
The management team should have 8 -10 years cognate
experience. They should be registered members of chartered institute of
management.
Your boards of directors are usually regularized by the
regulatory bank and should not comprise more than 5 members. The terms of
establishment of management teams might differ in each country.
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