The Bank Manager - Friend or foe

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The Bank Manager - Friend or Foe

There are many people who never learned or have lost track of what banks are all about. Basically banks are a business like any other. They don’t have any money of their own, at least not to lend out to other people.

Banks invest money that is deposited by people who have money that they wish to leave in a safe place and earn interest. The banks than take that money and lend it to other people at much higher rate of interest. The difference in the two interest rates is their profit.

Banks also have overheads which they have to recover before they can make profit. These overheads are much the same as any high street retailing organisation, including rent, rates, utilities, central management fees as well as the cost of hiring and training qualified staff.

These overheads are recovered and any subsequent profits earned by controlling their overheads, lending as much money as possible at the highest possible rates and charging as much as they can get away with for their service

Banks are usually publicly owned, and their shareholders have every right to expect the banks to make as much profit as possible.

That’s how banks operate. It’s as simple as that, yet many people are confused and believe that when you go to the bank for a loan, they are actually lending you their own money. Once you understand that fact, if you haven’t done so already, you understand to an extent the ongoing predicament that banks are in, and have been in since time immemorial.
Banks are in business to lend money. If they don’t they will be out of business in no time. They also need to make sure that when they lend money, they have a more than reasonable to chance that their customers will meet their commitments and repay their loans, and on time.

Banks distribute responsibility to their staff in layers, from the area manager to the branch manager downwards. There are very few people that get to meet the area manager, quite a few people who get to meet their branch manager. The chances are that most people who are running a private bank account will deal with their favourite clerk who knows their face and will exchange some pleasantries during the course of managing your account for you, However you shouldn’t forget for a second that your account is being constantly monitored as the bank looks out for abnormalities in the way you manage your account. On the plus side, if the bank sees that you have a lot of surplus cash sitting in your current account; it won’t be too long before you get a friendly call suggesting that you put some of that spare money on deposit. That is a sign that you are working with a bank that cares about you as much as their profit.

On the other hand if you have taken loans from the bank and are not keeping up with them, you might get a call to ask you how you intend to set your account in order.
You will be well advised not to ignore these calls, as they will not go away. If there are extenuating circumstances, and your previous dealings have been in order, you might even find that the bank will show considerably flexibility in helping you through a difficult phase.

To sum up, in the computerized driven age in which we live, personal contacts have much less influence than they did not so long ago. How you manage your account will determine if your bank manager is your friend or foe, even though you may never meet.