What is Bank Management?

what is bank mgt

Have you ever wondered what banking sector concerns the efforts to maximize profits?

It’s the Bank Management Sector.

A bank’s efforts to maximize profits depend on a variety of concerns. You need to have all these concerns, such as asset management, liquidity management, capital management and liability to work in conjunction to derive profits.

And, Bank Management governs such concerns.

Article at a Glance

  • The Definition of Bank Management
  • Objectives of Bank Management
  • Characteristics of Bank Management
  • What Does a Bank Manager Do?
Bank Management

The Definition of Bank Management

One can come across many definitions of bank management. Usually bank management means the process of governing the bank’s statutory activities. Bank management can be defined by the particular object of management – financial activities connected with banking concerns. Bank management also concerns the application of management functions in the banking sector.

Objectives of Bank Management

The main objective of bank management is to coordinate elements of banking activity with a view to generating profits. While doing so, bank management ensures an optimal and organic system of interaction those elements.

Characteristics of Bank Management

The characteristics of bank management are determined by the following factors:

  • Management expertise in planning, management functions, strategic analyses and policy development
  • Liquidity management
  • Planning quality
  • Risk management
  • Interest rate, currency and credit risk management
  • Management of human resources
  • Management of control systems
  • Auditing, and internal auditing
  • Management of profitability and risk liquidity
  • Management of information technology system: accounting, strategic planning, current analysis and integrated workflow automation

What Does a Bank Manager Do?

A person tasked with managing the bank’s financial and other banking activities is called a Bank Manager. Here’s what a Bank Manager has to perform regarding bank management:

  • A Bank Manager discusses the trends affecting the whole financial services and related industries.
  • He/she outlines how the behavior of banks changed.
  • A Bank Manager assesses the effects of change for bank risk management.
  • A Bank Manager recognizes the need to coordinate risk management procedures to an ever-changing international financial system.
  • He/she assesses the relationship between capital adequacy and bank performance.
  • A Bank Manager discusses how interest-rate risk can be averted using hedging activities through the use of financial derivatives.
  • A Bank Manager analyzes how costs and funding mix are vital to bank management when giving loan and making investment decisions.

Bottom Line – to maximize profits, you need concerted efforts coordinating all the banking concerns. And, effective bank management can help you derive maximum profits with minimum risks.

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