Cash and credit operations of banks

A bank as a commercial institution can provide a large amount of financial services, but there will be two main types of operations – cash and credit. What are the specifics of those and others? How can the importance of both types of operations be traced to the development of the credit institution?

Specifics of cash transactions in banks

Specifics of cash transactions in banks

What are bank cash transactions? These include receiving cash and other valuables from clients of credit and financial organizations, as well as issuing relevant assets to them or other citizens who request them. Cash is often regarded as one of the institution’s most liquid assets but is considered to be low-income.

The main purpose of these operations is the organization of the credit organization’s customer service system. In this case, the turnover of funds is regulated by regulations issued primarily by the central bank, which has the status of a national issue center.

Cash operations of Russian banks are the most important area of ​​economic activity of the relevant institutions. Receiving money from clients – individuals, legal entities, organizations increase the available reserves, which can later be used to carry out activities with high returns, especially in connection with the issuance of loans – private, corporate.

The Bank may receive additional cash turnover income, for example by charging a fee for the issuance of cash in certain cases (this is usually the collection of income from the accounts for the settlement of businesses).

Bank cash transactions are executed according to the following principles:

– cash turnover is carried out in accordance with standards adopted by the Central Bank of the Russian Federation;

– cash is placed in internal accounts with the credit institution;

– the establishment of balance limits is carried out in accordance with the provisions adopted.

There are a special subspecies of cash transactions – those carried out by the regulator, the central bank. It will be useful to study their specifics in more detail.

Cash operations of the Bank of Russia

Cash operations of the Bank of Russia

Thus, not only commercial banks to carry out cash transactions, but also a credit regulator – the Central Bank of the Russian Federation. They are carried out under the service of private institutions on a contractual basis. These operations allow you to:

– optimize cash turnover by a commercial credit institution;

– provide operational calculations on client accounts of natural or legal persons;

– make timely transfers of funds to banks regarding limit requirements.

Addressing each of the CBR’s tasks involves compliance with laws or local regulations. Given the bank’s monetary operations, which perform control and supervisory functions on the credit and financial markets, we will study the specifics of these procedures carried out by commercial institutions.

Cash transactions in commercial credit institutions

Cash transactions in commercial credit institutions

Private banks carry out cash operations that focus on customer service – individuals or legal entities. In this case, the rules issued by the regulator – the central bank of the Russian Federation – apply. The main operations of banks that are carried out in the commercial segment of the credit and financial sectors are reduced.

– receive cash;

– issuing cash.

The first group of operations assumes that the client or partner of the institution transfers cash:

– cash register;

– collectors who subsequently transfer funds to the bank;

– partner organizations that then transfer cash to the credit institution by bank transfer.

Payment of funds in most cases is made directly at the cash desk of a financial institution. Where cash is required for a legal person, its receipt may be made on the basis of supporting documents confirming targeted spending.

Treasurer function



In banks dealing with cash transactions working specialists with competence in this kind of activity – cashier. They are responsible for the correct calculation of the amounts to be received by customers or, conversely, for the issue, crediting and confirmation of the necessary documents.

The cash register also ensures a reliable deposit of funds – for example, using a safe. The work of the profile specialist is also quite strictly regulated by law.

Cash Restrictions

Russian legislation provides for several restrictions on the use of cash payments. Therefore, cash transactions of banks in accounts held by legal entities can only be made subject to the limits set by law. Conversely, such transactions, on behalf of individuals, as well as in settlement between citizens and organizations, can generally be carried out freely, regardless of the amount of cash.


So we looked at what constitutes the main monetary operations of banks are cash and credit. The first is sufficiently highly liquid, but not very profitable. Bank cash transactions generate revenue, mainly due to the credit institution’s commission. They indirectly determine the appearance of profit through the creation of reserves in the bank, which can be used in other areas of activity.

Conversely, the latter may significantly increase the capitalization of a financial institution. After the loan is issued, the bank usually expects to receive a sufficiently high profit, but there is a chance that the client will not be able to repay the loan due to financial difficulties.

Which banking operations take precedence from a certain point with respect to the implementation of the business model at a particular point in time is introduced by the management of a financial institution. In many ways, it depends on the value of the central bank’s key rate. The higher it is, the less intensive the credit market is, and it makes sense for the bank to develop more actively the areas related to cash customers.