Know, Investment Banking and Its Types in Indonesia

Financialtreat – will explain about  Know, Investment Banking and Its Types in Indonesia which you will get in the following article. let’s look at this article carefully!

A bank is a financial intermediation forum generally established with the authority to receive deposits of money, lend money, and issue promissory notes or what is known as a banknote. The word bank comes from the Italian banca which means money changer. Therefore, Investment banking is used to carry out various types of activities carried out by the Bank.

Meanwhile, according to the banking law, a bank is a business entity that collects funds from the people in the form of deposits and distributes them to the people in the form of credit or other forms in order to improve the standard of living of the people. The investment banking industry has undergone major changes in the last few years.

Know, Investment Banking and Its Types in Indonesia

The industry is becoming more competitive due to regulated provisions. Today, banks have flexibility in the services they offer, the locations where they operate, and the rates they pay for depositors’ deposits. A bank can also be interpreted as a business entity that collects funds from residents in the form of deposits and distributes them to residents in the form of credit or other forms in order to raise the standard of living of many residents.

Digitalization is also disrupting the banking sector, where we are seeing a transition from distribution networks: branch offices (Physical), telephone banking services (Analog) and internet and mobile banking services (Digital). To help grameds better know the bank and its scope as well as various other financial forums, the book Bank and Other Financial Forums are here to help in solving these problems.

Banking Benefits

  • As a type of investment, which means, derivative transactions can be used as a type of investment. Although it is generally a type of short-term investment (Yield enhancement).
  • As a way of hedging, which means, derivative transactions can serve as a way to eliminate risk by hedging, or also known as risk management.
  • Price info, which means, derivative transactions can serve as a vehicle for tracking or adding news about the price of exclusive commodity goods in the future (Price discovery).
  • Speculative benefits, which means, derivative transactions can provide additional speculation opportunities (Profitability) on changes in the market value of derivative transactions themselves.
  • • The benefits of production management are well-run and efficient, which means that derivative transactions can give an additional image to a producer’s production management in assessing future market demands and needs.
  • • As explained above, where banks have many uses in the midst of the people, Grameds can deepen the basic concepts related to banking and also other financial forums through the book Bank and Financial Forum Edition 2.

Types of Banks (Investment Banking)

In simple terms, the way banks work starts from the savings deposited by their customers. The funds collected from customer savings will be lent to parties who need capital with higher interest.

The funds raised earlier can also be reinvested into other investment instruments such as government bonds (Bonds). The interest obtained from the difference between the borrower and the investment return to the customer is what will later become the bank’s profit.

1. Types of Banks According to Their Functions

a. Resident Credit Bank

A Community Credit Bank (BPR) is a type of bank that carries out business activities conventionally or based on sharia principles, which in its activities does not provide services in payment traffic. The activity of rural banks is much narrower when compared to the activities of commercial banks.

This is because BPR is prohibited from receiving current account deposits, foreign exchange activities, and insurance as is done in other types of banks in general. Duties of the Community Credit Bank. Collecting funds from the people in the form of deposits in the form of time deposits, savings, and or other forms that are equated with it.

Providing additional credit with the potential of microfinance businesses such as BPR today, many people are competing to establish this forum without comprehensive and fundamental learning. The Smart Book on BPR Management of Microfinance Finance Forum was prepared in order to provide additional alternative guidelines to all parties involved in the microfinance forum.

b. Central Bank

The central bank in a country, in general, is an agency responsible for monetary policy on the territory of the country. The benefits and role of central banks seek to maintain the stability of currency values, the stability of the banking sector, and the financial platform in total.

In Indonesia, central bank benefits are held by Bank Indonesia (BI). As the central bank, BI has one single goal, which is to achieve and maintain rupiah stability. The stability of the rupiah value contains two aspects, namely the stability of the currency value in goods and services, and also the stability of the currencies of other countries.

To achieve this goal, BI is supported by three pillars, which are its three areas of duty. These three areas of duty are to establish and conduct monetary policy, regulate and maintain a smooth payment platform, and also regulate and supervise banks in Indonesia. Duties of Bank Indonesia:

  • Conducting and settling monetary policy.
  • Set up and maintain a smooth payment platform.
  • Regulate and supervise the performance of banks.

In its own implementation, within the central bank there are policies that are included in the basics of the theory and reality of monetary policy and also the principles and practices that apply. Learn that throughout in the book Central Bank Policy : Theory of Practice.

c. Commercial Banks

Commercial banks are banks that carry out business activities conventionally and or based on sharia principles, which in their activities add services in payment traffic which in their activities provide additional services in payment traffic.

The delivery of services provided is common, in the sense that it can provide additional all existing banking services. Similarly, its area of operation can be worked on in all regions. Commercial banks are often called commercial banks. Duties of Commercial Banks:

  • Collecting funds from the people in the form of deposits.
  • Disbursing funds to the people in the form of loans.
  • Issuing money through credit and investment payments.
  • Offers financial services such as credit cards, traveler’s checks, ATMs, interbank money transfers, and so on.
  • Provide facilities for interstate or international trade.
  • Serves the storage of valuables.

Grameds can learn how it works in commercial banks and also other explanations about commercial banks which are certainly important through the book Commercial Bank Management by Julius R. Latumaerissa.

2. Types of Banks Based on Their Ownership

a. Mixed Banks

A mixed bank is a type of bank whose shareholding is mixed between foreign parties and national parties. The bank’s shares are mostly owned by Indonesian citizens, but some are also owned by foreign parties.

Examples of Mixed Banks of Bank ANZ Indonesia. Bank Commonwealth, Bank Agris, Bank BNP Paribas Indonesia, Bank Capital Indonesia, Bank Sumitomo Mitsui Indonesia. And Bank Windu Kentjana International

b. Foreign Banks

A foreign bank is a branch of a bank that exists abroad. Either belonging to a foreign bank or a foreign government. Its ownership is owned by foreign parties as a whole. Examples of Foreign Banks: Bank of America, Bangkok Bank, Bank of China, Citibank, Deutsche Bank,, Hsbc, The Bank of Tokyo-Mitsubishi Ufj.

c. Government Bank

A government bank is a bank whose shares are partly or all owned by the Government of Indonesia. Examples of Bank Pemerintah Bank Berdikari, Bank Negara Indonesia (BNI), Bank Penduduk Indonesia (BRI), Bank Tabungan Negara (BTN).

d. National Particle Bank

A particle bank is a bank where most of its shares. Are owned by the national particle and also the deed of establishment is established by the particleir. The distribution of the profits is also for the national particle.

Particle banks are divided into two. Namely foreign exchange national particle banks and nondevision national particle banks. Examples of National Particle Bank Muamalat. Bank Central Asia (Bca), Bank Danamon, Bank Duta, Bank Nusa Internasional. Bank Niaga, Bank Universal, Bank Mega, Bank Bumi Putra.

Read more financial management:

f. Cooperative Bank

A cooperative-owned bank is a type of bank whose shareholding is owned by a cooperative incorporated company. This bank applies the principles and principles of cooperatives in general. An example of a Cooperative Bank is the Indonesian Cooperative Commercial Bank.

Thus this article that reviews Investment Banking which aims to be able to save money. And also all the activities carried out by the Bank and thank you.

Leave a Comment