What must be put in the finance companies?

Commercial Banks Savings institutions Finance Companies Ownership Provide service in local communities. Saving banks are community focus form Common practice defines community financial, mutual-base institutions, and banks as those with less than 10 billion in encourage savings among the poor. assets. Business Traditional retail banking services to local Savings bank provides saving Model communities. Obtain core deposits from products, home loans, other consumer within the community and make most of loans, and loans for local businesses. their loans to households and businesses in the same community. Joint stock Some commercial banks are privately Depositors (the members) are or Mutual owned, however, a majority are technically the owners of the bank. In organized as stock charters with stock some banks, members may privately held in the hands of a relatively have one vote while in others they small number of locally-based investors. may have a number of votes linked to The stock tends not to be widely traded. their level of deposits. Profit For-profit institution. However, they may Do not seek to maximize profits, Orientation not necessarily seek to maximize profits, however successful saving banks trading some generate a surplus (profits) which is profit potential for the longer-term used to build reserves. Depositors are interests of their local communities. not allowed to share in profits, they are Profits are distributed to owners/shareholders relative to their only entitled to an established rate of interest. ownership stake. Capital occurs from either retained earnings or Wealthy public-spirited benefactors Formation from external sources. The latter tends to contribute to the initial capital. Over be in the time, the initial capital was added to form of private placements that are from the bank's retained earnings. subscribed by the current owners and directors of the bank or other local investors. Governance Directors are appointed by shareholders Supervised by a board of directors or to represent their interests. Voting rights board of trustees. In some cases, the are in proportion to shareholding. board is elected by the members who have either one vote each or a number of votes, which is capped and related to the deposit amount. In other situations, the board may be elected by a small group of depositors or even by existing directors. Ownership Owners/stockholders have a legal claim on both profits and accumulated capital. Depositors (members) do not have Rights any legal claim on profits or Ownership accumulated capital. rights are tradable and in consequence, community banks are subject to market discipline