Banking and financial institutions have shown a lot of troubles in their inner management in the past couple of years. Many of them are crashing down. Several of them are suffering from a credit crisis.
Researchers have blamed this on the management and handling of banking affairs. Whenever a bank fails, it is clear to the customers that their money might not be safe. With so many episodes of banks getting on their knees, customers do not have a fair idea of which one to choose.
Customers entrust their hard-earned money to banks with confidence that they will handle it with due diligence. Some people pull their life savings into bank deposits with the thought that it will be safe. And why not? What else is safer than banks? But because of these mis-happenings in the previous decades, people are losing faith in banks. They are confused about whether to deposit their money in it.
Banks are letting no stone unturned to get back the faith of the customers. They are gradually enhancing their management and overall structure to ensure enough security. By increasing the number of bank audits by carefully gazing through the documentation of customers, they assure that no physical threat or frauds occur.
Among all these, how can a customer ensure which bank is safe for him to deposit all his money? Of Course, not all banks are the same. Here are various tips which will tell you the answer.
Financial Aspects
These are the financial aspects that one should check to ensure the financial health of the bank. If it is workable, then the money kept is safe. There is no threat of the bank crashing down.
Gross NPA
Non-performing assets are the assets of the banks that have turned bad. There is no scope of recoverability through that asset. In layperson’s terms, it is not an asset anymore. Banks have a specified period during which they consider these assets as non-performing. Generally, this duration is three months. If a bank has a lot of NPA, it means that the bank is not performing well and might crash down.
Capital Adequacy Ratio
This ratio ensures the banks whether they have enough capital to meet their currency obligations.
This ratio is to see whether or not the bank is performing above the line. This line here means whether they have enough capital or bare or none. It is easy to calculate. Anyone with financial information about the bank can work out to see whether the bank is underperforming or weight down.
CASA Ratio
This ratio is the proportion of current accounts and savings accounts of banks. It is a means to measure whether the bank has sufficient savings accounts in their total deposits. When a bank has a lower CASA Ratio, it means that it relies heavily on wholesale funding. This funding is costlier than the others. It can seriously hurt the margins of the banks.
Non-Financial Aspects
Management Of The Bank
The significant aspect of the banking regulations is how well the manager manages the bank. Whether there are attempts to retain customers. Whether they duly meet the demands and worries of customers.
The management handles the overall functioning of the banks. They have to ensure that the bank safe deposit box of customers is kept under top security. We hear the news of bank theft almost every day. It has created a negative mindset in people. To eliminate this, surveillance should not only be kept but should also be seen.
Locks And Safes
The locks and doors should be highly advanced, and the safes should be hard to crack. It is one of the general guidelines to which banks often lag to adhere. Every employee should ensure that the locks and drawers are always locked.
The managers should distribute authority accordingly. One person should not be managing all the cash transactions. There are higher chances that the person might abuse their jurisdiction. Recently, banks are taking help from a smart lock company that ensures safe installation and maintenance of the locks and safes.
Cleanliness Protocols
Even though this step of the checklist does not show relevance to the safety of the banks. It creates a positive image in the minds of the consumers. The brand image of the bank is an essential characteristic to build. Keeping the banks clean and sidestepping the papers and documents to pile up on the counters of the employees is the first step that can create productivity.
Just like there are various laboratory consumables manufacturers that can provide necessary consumables and cleaners to their research offices; Likewise banks should take help of similar engagement. It can harbor a constructive environment inside the bank.
People always prefer clean places. It gives them a sense of quality. The managers should standardize the procedures and ensure that customers see the banks as their perfect place for deposits. It shall work longways in their favor.
