A chartered bank is a financial institution that obtains authorisation from either the national or state authorities to offer banking services
Ensures rigorous regulatory standards for public confidence.
Provides essential financial services: accounts, lending, and investment.
Manages financial resources, preserving financial stability.
Chartered banks are crucial to the functioning of any financial system as they facilitate economic activity through services such as deposit accounts, loan products, and investment products.
Chartered banks operate within a regulatory framework aimed at protecting depositors and ensuring stability. This framework includes the following key components:
Prudential Regulation Authority: This organization ensures banks manage risks and maintain enough capital to cover potential losses. Its goal is to uphold financial system stability by requiring sufficient capital and effective risk management.
Financial Conduct Authority: It ensures that banks treat customers fairly by overseeing the transparency of financial products and services. It also protects customers from deceptive practices.
Anti-Money Laundering and Counter-Terrorism Financing Compliance: Policies on anti-money laundering and counter-terrorist financing prevent financial crimes. To prevent illegal use of their financial systems, chartered institutions must establish policies that identify and report suspicious activities.
What do chartered banks actually do for us?
Chartered banks offer a range of important services for managing both personal and business finances, including:
Deposit Accounts: Checking and savings accounts are the two most common services that chartered banks provide. These help individuals and businesses to move and process their money and earn interest on their deposits.
Loans and Credit: There are various lending products such as business loans, mortgage loans, and personal loans. These are essential for those who desire to finance large purchases, like buying a home or expanding their business.
Investment Products: Banks offer various investment products. These include stocks, bonds, mutual funds, and so on. Such products offer clients diverse investment opportunities. These are very instrumental in the creation of wealth and the realisation of set financial goals.
Why should we care about chartered banks?
Chartered banks play a very important role in the health and stability of an economy. Some of the specific roles played by chartered banks are:
Facilitating transactions: This involves managing the payment of one's transaction, completing the transactional process, and offering financial services that an individual can use in various activities.
Supporting economic growth: Chartered banks help out with personal and business expenses by offering loans and credit. This kind of financing is key for boosting economic growth, whether it’s by helping businesses expand or encouraging people to save more.
Promoting financial security: Chartered banks provide a safe place for people and businesses to keep their money, which is crucial for protecting your funds and maintaining trust in the financial system.
Chartered banks might not get much attention, but they’re essential for keeping the economy stable and our money safe. Even if we don’t think about them every day, we all rely on them to make sure everything stays on track.