What is the nature and basic business of China s commercial banks?

Judging from the origin and history of commercial banks, the nature of commercial banks can be summarized as: comprehensive and multi-functional financial enterprises with the pursuit of profits as the goal and financial assets and liabilities as the object.

China's newly revised Commercial Bank Law of the People's Republic of China in 2015 stipulates that a commercial bank refers to an enterprise legal person established in accordance with the Law and the Company Law of the People's Republic of China to absorb public deposits, issue loans, handle settlements and other businesses.

First of all, a commercial bank is an enterprise, and it has the basic characteristics of a modern enterprise.

Like other industrial and commercial enterprises, commercial banks also have the free funds needed for business operations, and they also need to make independent accounts and be responsible for their own profits and losses, and they must also take the pursuit of maximum profits as their business objectives.

Maximizing profits is the basic premise for the emergence and development of commercial banks, and it is also the internal driving force for the operation of commercial banks.

Second, commercial banks are special compared to ordinary industrial and commercial enterprises.

The particularity of commercial banks is manifested in the differences between the objects and contents of their operations and those of ordinary enterprises.

Industrial and commercial enterprises are engaged in the production and circulation of commodities with certain use value; On the other hand, commercial banks are engaged in financial assets and financial liabilities, and they operate special commodities -- money and monetary capital, and their business contents include currency receipts and payments, loans, and various financial services related to monetary movements.

From the point of view of the process of social reproduction, the operation of commercial banks is the condition for the operation of industrial and commercial enterprises.

The difference between commercial banks and ordinary industrial and commercial enterprises makes commercial banks a special kind of enterprise -- financial enterprises.

Finally, commercial banks are different from specialized banks.

The business of commercial banks is more comprehensive and functional, operating all financial "retail" business (store services) and "wholesale business" (large-amount credit business), providing customers with all financial services.

Specialized banks, on the other hand, only concentrate on the operation of businesses and provide specialized services within a specified area.

With the deregulation of financial services in Western countries, the business scope of professional banks is also expanding, but there is still a gap compared with commercial banks.

Commercial banks have an advantage in business operations.

Commercial banks have the following characteristics:

1) Commercial banks must be established in accordance with the law. The establishment is based on the relevant provisions of China's Commercial Bank Law and Company Law.

2) The main business of commercial banks is to absorb deposits and issue loans, and to operate other Chinese businesses, such as settlement business. Other non-bank financial institutions, such as insurance companies and finance companies, do not handle deposits and loans. Therefore, it does not fall under the category of commercial banks.

3) Commercial banks, like general industrial and commercial enterprises, are profit-oriented enterprises. A commercial bank has its own capital required for business operations, operates autonomously in accordance with the law, assumes responsibility for its own profits and losses, takes profits as its goal, and assumes external liabilities with all its corporate assets. Commercial banks aim to maximize profits.

Its pursuit of profit is manifested as: the establishment or operation of a commercial bank to bring profits; Whether a particular transaction or customer is accepted depends on whether it can bring profits to the bank.

4) Commercial banks are special enterprises that are different from general industrial and commercial enterprises. Its particularity is embodied in the differences in the business objects. Industrial and commercial enterprises are engaged in the production and circulation of commodities with certain use value; Commercial banks, on the other hand, deal with a special commodity – money.

Therefore, commercial banks are a special kind of enterprises that are different from industrial and commercial enterprises - financial enterprises.

5) Commercial banks are also different from specialized banks and other financial institutions. Specialist banks only concentrate on the operation and provision of specialized services within a specified area. Other financial institutions, such as trust and investment companies and leasing companies, have a narrower business scope and are not commercial banks.

The business of commercial banks is comprehensive, including liability business, such as deposits, issuance of financial bonds, as well as asset business, such as lending, investment, and intermediate business, such as settlement.

The nature of a commercial bank is that of a financial enterprise. The English name of commercial bank is commercial bank, which belongs to a type of bank. There are two main business models of commercial banks, one is the British model and the other is the German model.

The UK model refers to banks taking deposits at a relatively low interest rate and lending at a relatively high interest rate. The German model means that banks not only have short-term financing business, but also invest in other banks. Banks in China operate separately.

The business of commercial banks mainly consists of taking deposits and issuing loans. Banking can be traced back to ancient Babylonian times BC. The emergence of commercial banks in the early days has an important relationship with the emergence of international commercial banks, but the early banks only carried out currency exchange business and had no other business.

Commercial banks have a total of five functions, including regulating the economy, credit creation, credit intermediation, payment intermediation, and financial services. Among them, the function of regulating the economy refers to the fact that commercial banks can adjust the proportion of funds existing in various industries in society through the transfer of funds.

The functions of a commercial bank are as follows:

1. Acting as a credit intermediary: It is the most basic function of a bank. Commercial banks redistribute capital, so that money capital can be fully and effectively used, accelerate the turnover of capital, and promote the development of production;

2. Act as a payment intermediary: handle the transfer and transfer between accounts for customers, save cash and reduce circulation costs to the greatest extent, and speed up the settlement process and the turnover of monetary capital;

3. Credit creation function: by absorbing demand deposits, issuing loans, on the basis of check circulation and transfer settlement, loans are converted into deposits, increasing bank funds, forming derivative deposits several times the original deposits in the banking system, and expanding the amount of social money;

4. Financial services: Banks take advantage of the special status and advantages of wide contacts and well-informed information in the national economy, and provide customers with various financial services such as information consultation, financing, trust leasing, collection and payment, etc., with the help of advanced means and tools such as computers.

A commercial bank is a financial enterprise that deals in currency with deposits, loans, transfers and settlements as its main business and profit-making as its main business objective.

Commercial banks refer to financial institutions that mainly collect interest and commissions as their main mode of operation, and their functions are to issue loans, collect deposits, pay and settle services, etc., which are the foundation of the financial system.

At present, there are three main classifications of commercial banks in China: state-owned commercial banks, joint-stock commercial banks, and foreign-funded commercial banks.

State-owned commercial banks refer to financial institutions that are the main shareholders and are mainly engaged in the business of Li Shi commercial banks, such as Bank of China, Agricultural Bank of China, Bank of Communications, China Construction Bank, etc.

Joint-stock commercial banks refer to commercial banks that are capital-based and joint-stock based, such as China CITIC Bank, Minsheng Bank, China Merchants Bank, Shanghai Pudong Development Bank, etc.

Foreign-funded commercial banks refer to joint-stock commercial banks composed of foreign-funded enterprises, Hong Kong, Macao and Taiwan businessmen and other foreign investors, such as Standard Chartered Bank, East West Bank, HSBC, Woori Bank, etc.

The main functions of commercial banks include issuing loans, collecting deposits, making payments, providing settlement services, and financial advisory.

Commercial banks will develop more strongly, because the development of commercial banks will promote economic development, provide financial services for enterprises, improve the level of financial services, and provide better financial support for social development.