This lesson examines how banks fund their lending activities, focusing on deposit mobilisation and wholesale funding.

3.1 Funding Sources

Banks have a range of funding sources :

  • Customer Deposits: The most stable and cost-effective source of funding. The Coursera module explores strategies for mobilising deposits and account opening guidelines .

  • Short-Term Wholesale Funding: Commercial paper, repurchase agreements (repos), and interbank borrowing.

  • Long-Term Wholesale Funding: Bonds and subordinated debt.

  • Shareholders’ Equity: The most stable, but most expensive, source of funding.

3.2 Deposit Products and Services

Banks offer a range of deposit products to attract retail and commercial customers. The Coursera curriculum covers account opening guidelines, operational procedures, deposit-related services, and services for Non-Resident Indians (NRIs) . This includes current accounts, savings accounts, and time deposits.

3.3 Non-Deposit Funding and Off-Balance Sheet Activities

Banks also raise funds through non-deposit sources. The NPTEL course covers “Management of Non-Deposit Liabilities” and “Management of Off-Balance Sheet Activities” . This includes wholesale borrowing and activities such as loan commitments and letters of credit.

PreviousNext