Most of us has been hearing about the public bank as a financial institution that provides many financial services for their customer. There are many public banks all over the world with various financial services and benefits. Therefore, each people can select their preferred bank for their saving account. However, some people might feel curious about the overview of this bank. To help give information about the bank, the following paragraphs will explain more.
Public Bank Definition
A public bank is referring to a bank which owned by the government of the country. Therefore, the bank is under the control of the government and run the financial services according to the country’s regulation. Furthermore, a bank which owns by the government will be facilitated entirely by the government and its daily operation will be also fully controlled by the government.
The way of a public bank works will give advantages and disadvantages at the same time too. The good side is that this bank will make sure that their customer is protected under the government regulation and will be fully guaranteed by the government too. Any deposits, accounts, investments, and anything via a public bank will have proper protection from the government.
On the other side, the disadvantage is the interest rate which is normally not too interesting. Since the value is commonly lower than other private banks around. Therefore, it might not be an appropriate selection to put a big investment in this kind of bank. Furthermore, usually, this kind of bank does not provide too many types of financial services. It normally provides fewer options for loans including minimum credit card services.
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Example of Famous Public Bank
Each country will normally own a public bank to support the country’s financial operation. Since this kind of bank sometimes becomes a support to other private banks around. Therefore, this is an important bank to provide in a country to help the community get sufficient protection to their account and savings.
Some of the famous public banks such as the bank in the US or China. In the US, you can meet the Bank of North Dakota. While in China, normally people prefer to select the Bank of China as their public saving account. In India, you will find the State Bank of India, and in Germany, you can get the German Public Bank. By selecting this kind of bank, all account, savings, and investment will be guaranteed by the American government and by China government.
Not only preferred by local communities but these famous banks also grow better to serve many customers from foreign countries too. Therefore, these banks will be a good selection to make sure a secure savings and accounts while you staying in one of those countries. You wouldn’t need to worry about the possibility of losing money in this account or losing investment. If this bank is in collapse means that the government is in a major situation too.
Low-Interest Rate of Public Bank
As mentioned previously that one of the disadvantages of selecting a public bank is the low-interest rate given by this bank. It is not surprising since the guarantee of this bank is the local government. Which will cover all the accounts, savings, and investments from the bank customer. Therefore, to avoid further large cost possibilities from the bank, it manages to press the interest rate to their customer to keep as low as possible. So that in case of anything happen to the government financial capability, it can keep cover the bank and guarantee all the bank customer accordingly.
These low rates also have an impact on the services of the bank. Mostly the bank will fund the public projects which will be a benefit to the entire community. Such as for infrastructures and public schools. So that usually this kind of bank is not looking for more customers. But more to manage the public operation in getting sufficient funds for any development.
Public Bank Relationship with Economic Growth
Of course, the presence of this bank is necessary for the government. Since the public bank is the biggest source for a country to keep developing and manage a good growth in the country. Furthermore, this bank is the source for money-making and shall manage to monitor and control the money fluctuation. So that it is a good way to keep the economy in a country keep growing as expected.
Through the services provided by the public bank, the government can easily make sure that their economic condition is still balanced. So that the country is also able to keep growing better as planned by the government.
Those are all information related to a public bank, starting from the definition, the advantages, the disadvantages, the example, and any other relation affected by the bank. So that you can get a good overview of this bank and start to trust the bank as your saving account. By trusting the bank, you can get a secure service even though it might lead to lower interest rates. But somehow, it is more secure and avoids the possibility of losing your savings or investment.
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