The ongoing economic reform in the country has opened a new stage in the development of banking. In the conditions of transition to the market, the issues of prospects of the development of banks and other credit institutions in our country, its practical implementation become especially topical.
The solution of this task is possible only on the basis of studying the practical understanding of the functioning of Kyrgyz and foreign banks and the introduction of the most progressive, rational forms and methods of work in practice.
In recent years, there has been a rapid process of the formation of financial markets - the money market and the capital market. Development of the latter is impossible without improvement of the two-unit, interrelated process of mobilization of savings and investment of funds. Savings are the difference between income and consumption.
Investments are investments in order to generate income. The forms of investment of savings can be different: direct investment in production and indirect, when between the owners of savings and their final "consumption" are some financial intermediaries. It is important that ultimately the invested funds act as a factor contributing to the development of production and economic recovery.
Execution of banking operations with a wide clientele is an important feature of modern banking activities in all countries of the world that have a developed credit system.
The reform of the credit system in 1987-1990 s brought new commercial banks to life and introduced elements of competition into the banking sector.
It is known that the leading commercial banks of Kyrgyzstan strive to perform a wide range of operations and services for their clients in order to expand their income base, increase profitability and competitiveness. It is important to bear in mind that the development of banking activities involves the provision of banking services at minimal cost to clients and the bank itself, using reasonable prices for services required by clients.
An effective and flexible system of banking operations with a wide clientele can and should contribute to the mobilization of internal savings. In this regard, flexible banking services, capable of responding to the emerging needs of a changing economy, are of particular importance. Competition in the banking services market also influences the quantitative and qualitative characteristics of banking services.
Along with traditional banking services to the population - attraction of funds to deposits, provision of loans and implementation of cash and settlement services to the population - modern banking institutions in our country are also beginning to perform electronic services, marketing research on clients' orders, foreign exchange operations, other services, including trust, information and reference consulting, stock and other services.
The importance of activation of the role of banks serving the population is to promote the maximum effect, the most complete satisfaction of customers' needs in banking services, improvement of the quality of banking services to individuals, expansion of the range of banking services and reduction of their cost price.
The above mentioned, as well as the fact that the current state and prospects of development of banking services to the population were not the subject of special study of economists in our country, underlines the novelty and relevance of the topic of my diploma work in the transition to the market.
The theoretical and practical basis of this work is the materials of the study of economists on related problems both in our country and abroad, materials obtained in the process of analysis of the work of commercial banks of Kyrgyzstan and Western countries, statistical materials and data of periodical publications.
The specificity of the bank is determined by the peculiarities of its activities. The result of this activity is the creation of a banking product. Banking products are
1) creation of means of payment and
2) provision of services.
The creation of means of payment manifests itself at the level of the economy as a whole (or, as they say, at the macro-level). It is known that the exchange of labor products is not in the form of exchange of one product for another but in the form of purchase and sale. A commodity producer offers its goods to the market.
The buyer, in turn, can buy the goods he needs only if he sells his own product. In the market economy, money as a universal means of payment is needed to carry out the act of sale. Without their help, the exchange of labor between producers may not take place. The Central Bank, represented by the Central Bank, shall issue the money necessary for circulation, acquisition, and consumption of material goods and continuation of the reproduction process.