What Is Banking Sector
The banking sector is composed of multiple banks (commercial), development banks (building), the limited scope financial companies (Sofoles), public trusts that provide financing for the general public, the People’s Savings Bank and Financial Services (Bansefi) that promotes savings among citizens and businesses and finally, the Credit Information Companies (credit bureaus) that provide information to providers of financing on credit applicants.
To explore financing alternatives that companies have in Mexico, we analyze each of these groups separately, showing the overall operation.
Multiple Banking or Commercial Banking
The core functions of banking have not changed over time. Among the vital operations of any bank is found, the role of fund raising and the role of loans or equity investment, an undertaking of this kind which does not carry out these functions can not call the bank in the true sense of the word. The loan can be considered as the essence and life of banking institutions. All modern bank looking to grow loans based on sensible and sound policy and studied.
Banks are financial intermediaries with which the average person comes into contact more often, when you need a loan for buying a home, car, purchase of goods or equipment for your business, usually get it from your local bank.
Mexico is experiencing an accelerated process of legal and financial renewal, first derived from the nationalization of banks that was decreed in 1982, then as a result of the re-privatization of banks in 1990 and then by the inclusion of Mexico in the North American Free Trade Agreement United States and Canada (NAFTA). As a result of these factors, the financial inter mediation process has undergone profound changes, both in their regulation when issued new legal systems, as in the restructuring of the institutions that make up the Mexican financial system.
The Mexican banking has changed from private and almost one hundred percent Mexican, a nationalized banking (1982-1990) and now private again, but with the participation of foreign capital, resulting from deregulation in investment banking institutions.
Mexico and Latin America have lacked sufficient capital for many years due to various reasons such as weather problems affecting agricultural production and livestock such as instability in exports of minerals and hydrocarbons, and a negative trade balance in its trade with other nations . These factors have meant that interest rates are higher than in developed countries, which even though it is to attract foreign capital also expensive interest rates to which they can obtain loans.
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Tags: Banking Sector, Commercial Banking, credit applicants, financing on credit applicants, Multiple Banking