Commercial Banks make profit and generate revenue by two ways:
Interest income is the highest revenue and profit generator for any bank. And this is the non-fee based income for banks
we take/borrow money from the commercial banks and the commercial banks take/borrow money from the reserve bank
Do you mean commercial banks or investment banks?
The 8,700 commercial banks, which are about 98% of all banks in the country, hold the vast majority of demand deposits held by all institutions (banks, thrifts, credit unions). Their non-institutional competition is primarily money-market accounts. As the name implies, commercial banks make the majority of commercial loans, but also make more than 20% of all consumer loans.
Commercial banks obtain their funding in many ways. They may take up government bonds from the Central Bank, borrow money from other commercial banks, or source it from customers deposits. Shareholders funds are also used to make investments.
Investment banks provide financial services that are geared toward raising capital such as underwriting, issuance of securities, assisting in Mergers and Acquisitions, and investment management. Unlike commercial banks, they do not take deposits. While investment banks make their money by charging fees for their services, commercial banks earn their money by charging higher interest rates on loans than what they pay for people's deposits.
we take/borrow money from the commercial banks and the commercial banks take/borrow money from the reserve bank
Do you mean commercial banks or investment banks?
The 8,700 commercial banks, which are about 98% of all banks in the country, hold the vast majority of demand deposits held by all institutions (banks, thrifts, credit unions). Their non-institutional competition is primarily money-market accounts. As the name implies, commercial banks make the majority of commercial loans, but also make more than 20% of all consumer loans.
get money.
Commercial banks obtain their funding in many ways. They may take up government bonds from the Central Bank, borrow money from other commercial banks, or source it from customers deposits. Shareholders funds are also used to make investments.
Investment banks provide financial services that are geared toward raising capital such as underwriting, issuance of securities, assisting in Mergers and Acquisitions, and investment management. Unlike commercial banks, they do not take deposits. While investment banks make their money by charging fees for their services, commercial banks earn their money by charging higher interest rates on loans than what they pay for people's deposits.
The main thing the Fed does is that it is the Bank that Banks deposit their money in.
Time, is Money
A commercial bank is started by private investor(s), since a commercial bank's primary goal is to make profit by earning interest from loaning out money. The Federal Reserve Banks, or any other countries central banks like the Bank of England, are owned by the government and are created as a central bank to make sure the economy is healthy by controlling the money supply, regulating banks, etc.
Banks do not create any money. It only borrow and lend money from their customers. Banks are very important to economy because if bank have certain amount with them then bank can invest in other sectors. which will help in long term by giving them return. Banks have a certain team to do that.
The mission of HSBC bank, as with all commercial banks, is to make as much money as possible for it's shareholders.
to make profit