Diary of a day trader - Part 2
- Thread starter soft_trader
- Start date
Yes they do take in deposits but they are not a scheduled commercial bank (scb). These deposits are essentially in the form of savings a/c, recurring deposit, term deposit, ppf etc.
The key is that the liabilities generated is not used to lend out to entities requiring financing which is what the scbs do. They manage the assets & liabilities. For instance a Bajaj Finserv which is essentially an NBFC disburses loans but can't accept deposits. To make that net interest income (asset-liability interest differential) the entity needs to be an scb as per RBI.
Trivia: The institution which holds the largest deposits in the world is the Postal Department of Japan.
I hope this basic explanation clarifies.
Sorry for the intrusion in this thread as I follow it and couldn't resist answering as I am from the banking industry.
Enjoy!
The key is that the liabilities generated is not used to lend out to entities requiring financing which is what the scbs do. They manage the assets & liabilities. For instance a Bajaj Finserv which is essentially an NBFC disburses loans but can't accept deposits. To make that net interest income (asset-liability interest differential) the entity needs to be an scb as per RBI.
Trivia: The institution which holds the largest deposits in the world is the Postal Department of Japan.
I hope this basic explanation clarifies.
Sorry for the intrusion in this thread as I follow it and couldn't resist answering as I am from the banking industry.
Enjoy!
Last edited:
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