National bank
Encyclopedia
In banking, the term national bank carries several meanings:
In the past, the term "national bank" has been used synonymously with "central bank
", but it is no longer used in this sense today. Some central banks may have the words "National Bank" in their name; conversely if a bank is named in this way, it is not automatically considered a central bank
. For example, National-Bank AG in Essen, Germany is a privately owned commercial bank, just like National Bank of Canada
of Montreal, Canada. On the other side, National Bank of Ethiopia
is the central bank
of Ethiopia
and National Bank of Cambodia
is the central bank
of Cambodia
.
is the government-owned bank in based in Kabul, Afghanistan that controls Ariana Afghan as well as the Afghan National Bank.
n Act of Parliament
in 1911. Bank Nationalisation was the policy of the Andrew Fisher
Labor
Government. In a rare move for the time, the bank was to have both savings and general bank business. The bank was also the first bank in Australia to receive a Federal Government guarantee.
In 1958 and 1959, there was a controversy concerning the dual function of the bank as the central bank on the one hand and a general bank on the other. As a result of this, the bank was split, giving the reserve bank function to the Reserve Bank of Australia
and the general bank function to the Commonwealth Banking Corporation.
The Commonwealth bank was privatised in the 1990s by the Keating
Labor government. At present it is the second largest bank in Australia, after the National Australia Bank
which has always been privately owned.
's central bank see Bank of Canada
. The National Bank of Canada
is a privately owned bank unrelated to the central bank.
is the Bank of the Republic
. Its primary role is to control the flow of money inside and outside the country and to issue the Colombian currency, the peso
.
It replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of the Reserve Bank of India
, and the Agricultural and Development Corporation (ARDC).
NABARD’s refinance is available to State Co-operative Agriculture and Rural Development Banks (SCARDBs), State Co-operative Banks (SCBs), Regional Rural Banks (RRBs), Commercial Banks (CBs) and other financial institutions approved by RBI.
While the ultimate beneficiaries of investment credit can be individuals, partnership concerns, companies, State-owned corporations or co-operative societies, production credit is generally given to individuals.
NABARD operates throughout the country through its 28 Regional Offices and one Sub-office, located in the capitals of all the states/union territories. It has 336 District Offices across the country, one Sub-office at Port Blair and one special Cell at Srinagar. It also has 6 training establishments.
currently has one state-owned bank, Kiwibank
.
The New Zealand government formerly owned two other banks in New Zealand: The Bank of New Zealand
, from 1945 to 1992 when it was privatised and sold, and Post Office Savings Bank
, which was created as a separate entity with the privatisation of New Zealand Post
. PostBank
was sold to ANZ New Zealand
in 1989.
is a private bank corporation which, in 2003, was purchased by ANZ from its former owner, Lloyds TSB
.
is the state-owned central bank in Serbia
which regulates the currency Serbian dinar
.
era Bank of North America
, later, First Bank of the United States
, or its successor the Second Bank of the United States
. All are now defunct.
In the modern U.S. the term "national bank" has a precise meaning: a banking institution chartered and supervised by the Office of the Comptroller of the Currency
("OCC"), an agency in the U.S. Treasury Department, pursuant to the National Bank Act. The inclusion of the word "National" in the bank's name or the designation "National Association" or its abbreviation "N.A." is a required part of the distinguishing legal title of a national bank, as in "Citibank
, N.A." Many "state bank
s", by contrast, are chartered by the applicable state government (usually the state's department of banking). The Federal Deposit Insurance Corporation
(FDIC), insures all deposits at both national and state banks.
The advantage of a National Bank Act charter is that a national bank is not subject to state usury laws intended to prevent predatory lending. (However, see also Cuomo v. Clearing House Association, L. L. C., stating that federal banking regulations do not pre-empt the ability of states to enforce their own fair-lending laws.) There is currently no federal cap on rates. The federal government only requires that whatever rates, fees or terms are set by issuers be disclosed to the consumer in accordance with the Truth in Lending Act.
Notwithstanding the name, not all "national banks" have nationwide operations. Some "national banks" have operations in only one city, or county or state. "National banks" should also be distinguished from federal savings associations (which include federal savings and loans
, and federal savings bank
s, FSB), which are financial institutions chartered by the Office of Thrift Supervision
, another agency in the U.S. Treasury Department. The Federal Reserve
is the United States central bank.
- especially in developing countries, a bank owned by the stateState (polity)A state is an organized political community, living under a government. States may be sovereign and may enjoy a monopoly on the legal initiation of force and are not dependent on, or subject to any other power or state. Many states are federated states which participate in a federal union...
- an ordinary private bank which operates nationally (as opposed to regionally or locally or even internationally)
- in the United States, an ordinary private bank operating within a specific regulatory structure, which may or may not operate nationally, under the supervision of the Office of the Comptroller of the CurrencyOffice of the Comptroller of the CurrencyThe Office of the Comptroller of the Currency is a US federal agency established by the National Currency Act of 1863 and serves to charter, regulate, and supervise all national banks and the federal branches and agencies of foreign banks in the United States...
.
In the past, the term "national bank" has been used synonymously with "central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
", but it is no longer used in this sense today. Some central banks may have the words "National Bank" in their name; conversely if a bank is named in this way, it is not automatically considered a central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
. For example, National-Bank AG in Essen, Germany is a privately owned commercial bank, just like National Bank of Canada
National Bank of Canada
National Bank of Canada is the 6th largest bank and 8th largest financial institution in Canada. The bank's headquarters are in Montreal, Quebec....
of Montreal, Canada. On the other side, National Bank of Ethiopia
National Bank of Ethiopia
The National Bank of Ethiopia is the central bank of Ethiopia. Its headquarters are in the capital city of Addis Ababa. The bank's name is abbreviated to NBE.-History:...
is the central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
of Ethiopia
Ethiopia
Ethiopia , officially known as the Federal Democratic Republic of Ethiopia, is a country located in the Horn of Africa. It is the second-most populous nation in Africa, with over 82 million inhabitants, and the tenth-largest by area, occupying 1,100,000 km2...
and National Bank of Cambodia
National Bank of Cambodia
The National Bank of Cambodia, located in Phnom Penh, is the central bank of Cambodia. The bank's duties include, inter alia, the management of monetary and exchange policies, the regulation of banks and financial institutions, and the control of the national currency, the riel...
is the central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
of Cambodia
Cambodia
Cambodia , officially known as the Kingdom of Cambodia, is a country located in the southern portion of the Indochina Peninsula in Southeast Asia...
.
Afghanistan
Pashtany BankPashtany Bank
Pashtany Bank is the firm controlled by the Afghan government that controls the Central Bank of Afghanistan, the Afghan national insurance company and Ariana Afghan Airlines. It was established in 1954 to manage the Da Afghanistan Bank, the central bank of Afghanistan.Hayat Dayani is the President...
is the government-owned bank in based in Kabul, Afghanistan that controls Ariana Afghan as well as the Afghan National Bank.
Australia
The Commonwealth Bank of Australia was founded by an AustraliaAustralia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
n Act of Parliament
Act of Parliament
An Act of Parliament is a statute enacted as primary legislation by a national or sub-national parliament. In the Republic of Ireland the term Act of the Oireachtas is used, and in the United States the term Act of Congress is used.In Commonwealth countries, the term is used both in a narrow...
in 1911. Bank Nationalisation was the policy of the Andrew Fisher
Andrew Fisher
Andrew Fisher was an Australian politician who served as the fifth Prime Minister on three separate occasions. Fisher's 1910-13 Labor ministry completed a vast legislative programme which made him, along with Protectionist Alfred Deakin, the founder of the statutory structure of the new nation...
Labor
Australian Labor Party
The Australian Labor Party is an Australian political party. It has been the governing party of the Commonwealth of Australia since the 2007 federal election. Julia Gillard is the party's federal parliamentary leader and Prime Minister of Australia...
Government. In a rare move for the time, the bank was to have both savings and general bank business. The bank was also the first bank in Australia to receive a Federal Government guarantee.
In 1958 and 1959, there was a controversy concerning the dual function of the bank as the central bank on the one hand and a general bank on the other. As a result of this, the bank was split, giving the reserve bank function to the Reserve Bank of Australia
Reserve Bank of Australia
The Reserve Bank of Australia came into being on 14 January 1960 as Australia's central bank and banknote issuing authority, when the Reserve Bank Act 1959 removed the central banking functions from the Commonwealth Bank to it....
and the general bank function to the Commonwealth Banking Corporation.
The Commonwealth bank was privatised in the 1990s by the Keating
Paul Keating
Paul John Keating was the 24th Prime Minister of Australia, serving from 1991 to 1996. Keating was elected as the federal Labor member for Blaxland in 1969 and came to prominence as the reformist treasurer of the Hawke Labor government, which came to power at the 1983 election...
Labor government. At present it is the second largest bank in Australia, after the National Australia Bank
National Australia Bank
National Australia Bank is one of the four largest financial institutions in Australia in terms of market capitalisation and customers. NAB is ranked 17th largest bank in the world measured by market capitalisation...
which has always been privately owned.
Canada
For CanadaCanada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
's central bank see Bank of Canada
Bank of Canada
The Bank of Canada is Canada's central bank and "lender of last resort". The Bank was created by an Act of Parliament on July 3, 1934 as a privately owned corporation. In 1938, the Bank became a Crown corporation belonging to the Government of Canada...
. The National Bank of Canada
National Bank of Canada
National Bank of Canada is the 6th largest bank and 8th largest financial institution in Canada. The bank's headquarters are in Montreal, Quebec....
is a privately owned bank unrelated to the central bank.
Colombia
The national bank in ColombiaColombia
Colombia, officially the Republic of Colombia , is a unitary constitutional republic comprising thirty-two departments. The country is located in northwestern South America, bordered to the east by Venezuela and Brazil; to the south by Ecuador and Peru; to the north by the Caribbean Sea; to the...
is the Bank of the Republic
Bank of the Republic (Colombia)
The Bank of the Republic is the state-run central bank of the Republic of Colombia. Its main functions are detailed by the Congress according to the . One of them is the issuance of the Colombian currency, the peso.-History:...
. Its primary role is to control the flow of money inside and outside the country and to issue the Colombian currency, the peso
Colombian peso
The peso is the currency of Colombia. Its ISO 4217 code is COP and it is also informally abbreviated as COL$. However, the official peso symbol is $. As 20 July 2011, the exchange rate of the Colombian peso is 1750 Colombian pesos to 1 U.S. dollar.-History:The peso has been the currency of Colombia...
.
India
The National Bank for Rural and Agricultural Development (NABARD) was established on 12 July 1982 to implement the National Bank for Agriculture and Rural Development Act 1981.It replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of the Reserve Bank of India
Reserve Bank of India
The Reserve Bank of India is the central banking institution of India and controls the monetary policy of the rupee as well as US$300.21 billion of currency reserves. The institution was established on 1 April 1935 during the British Raj in accordance with the provisions of the Reserve Bank of...
, and the Agricultural and Development Corporation (ARDC).
Activities
- 1. serving as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas;
- 2. taking measures towards institution building for improving absorptive capacity of the credit delivery system, including monitoring, formulation of rehabilitation schemes, restructuring of credit institutions, training of personnel, etc.;
- 3. co-ordinating the rural financing activities of all institutions engaged in developmental work at the field level and maintains liaison with Government of India, State Governments, Reserve Bank of India (RBI) and other national level institutions concerned with policy formulation; and
- 4. undertaking monitoring and evaluation of projects refinanced by it.
NABARD’s refinance is available to State Co-operative Agriculture and Rural Development Banks (SCARDBs), State Co-operative Banks (SCBs), Regional Rural Banks (RRBs), Commercial Banks (CBs) and other financial institutions approved by RBI.
While the ultimate beneficiaries of investment credit can be individuals, partnership concerns, companies, State-owned corporations or co-operative societies, production credit is generally given to individuals.
NABARD operates throughout the country through its 28 Regional Offices and one Sub-office, located in the capitals of all the states/union territories. It has 336 District Offices across the country, one Sub-office at Port Blair and one special Cell at Srinagar. It also has 6 training establishments.
State-owned banks
New ZealandNew Zealand
New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...
currently has one state-owned bank, Kiwibank
Kiwibank
Kiwibank Limited is a wholly owned subsidiary of the state-owned enterprise New Zealand Post Limited. Through Kiwibank, New Zealand Post provides banking services through its PostShops and joint venture Books & More and Papermate outlets throughout New Zealand.The bank was initiated as part of Jim...
.
The New Zealand government formerly owned two other banks in New Zealand: The Bank of New Zealand
Bank of New Zealand
Bank of New Zealand is one of New Zealand’s largest banks and has been operating continuously in the country since the first office was opened in Auckland in October 1861 followed shortly after by the first branch in Dunedin in December 1861...
, from 1945 to 1992 when it was privatised and sold, and Post Office Savings Bank
PostBank
PostBank was the trading name of the Post Office Bank Limited, a bank owned by the New Zealand Government. PostBank was formed when the New Zealand Post Office was split up by the Postal Services Act 1987 into Post Office Bank Ltd , New Zealand Post Ltd and Telecom Corporation of New Zealand...
, which was created as a separate entity with the privatisation of New Zealand Post
New Zealand Post
New Zealand Post, commonly referred by its acronym, NZPost is a State owned enterprise responsible for providing postal service in New Zealand.-History:...
. PostBank
PostBank
PostBank was the trading name of the Post Office Bank Limited, a bank owned by the New Zealand Government. PostBank was formed when the New Zealand Post Office was split up by the Postal Services Act 1987 into Post Office Bank Ltd , New Zealand Post Ltd and Telecom Corporation of New Zealand...
was sold to ANZ New Zealand
ANZ New Zealand
ANZ New Zealand is New Zealand’s largest financial services group and is a subsidiary of Australia and New Zealand Banking Group Limited of Australia. ANZ New Zealand operates under its legal entity ANZ National Bank Limited which was formed as part of the 2003 merger of ANZ and The National Bank...
in 1989.
National Bank of New Zealand
The National Bank of New ZealandNational Bank of New Zealand
The National Bank of New Zealand often referred to as The National Bank is one of New Zealand's largest banks. Throughout much of its history, the National Bank has provided banking services to mainly rural, personal, and small business customers. Its owner is ANZ National Bank Limited, the New...
is a private bank corporation which, in 2003, was purchased by ANZ from its former owner, Lloyds TSB
Lloyds TSB
Lloyds TSB Bank Plc is a retail bank in the United Kingdom. It was established in 1995 by the merger of Lloyds Bank, established in Birmingham, England in 1765 and traditionally considered one of the Big Four clearing banks, with the TSB Group which traces its origins to 1810...
.
Serbia
National Bank of SerbiaNational Bank of Serbia
National Bank of Serbia is the central bank of Serbia; its main responsibilities are the protection of price stability and maintenance of financial stability....
is the state-owned central bank in Serbia
Serbia
Serbia , officially the Republic of Serbia , is a landlocked country located at the crossroads of Central and Southeast Europe, covering the southern part of the Carpathian basin and the central part of the Balkans...
which regulates the currency Serbian dinar
Serbian dinar
The dinar is the currency of Serbia. An earlier currency also called dinar was used in Serbia between 1868 and 1918. The earliest use of the dinar date to 1214. Today's Serbian dinar is a continuation of the last Yugoslav dinar...
.
United States
In the United States, the term "national bank" originally referred to the revolutionaryAmerican Revolutionary War
The American Revolutionary War , the American War of Independence, or simply the Revolutionary War, began as a war between the Kingdom of Great Britain and thirteen British colonies in North America, and ended in a global war between several European great powers.The war was the result of the...
era Bank of North America
Bank of North America
The Bank of North America was a private business chartered on December 31, 1781 by the Congress of the Confederation and opened on January 7, 1782, at the prodding of Superintendent of Finance Robert Morris. This was thus the nation's first de facto central bank. It was succeeded in its role as...
, later, First Bank of the United States
First Bank of the United States
The First Bank of the United States is a National Historic Landmark located in Philadelphia, Pennsylvania within Independence National Historical Park.-Banking History:...
, or its successor the Second Bank of the United States
Second Bank of the United States
The Second Bank of the United States was chartered in 1816, five years after the First Bank of the United States lost its own charter. The Second Bank of the United States was initially headquartered in Carpenters' Hall, Philadelphia, the same as the First Bank, and had branches throughout the...
. All are now defunct.
In the modern U.S. the term "national bank" has a precise meaning: a banking institution chartered and supervised by the Office of the Comptroller of the Currency
Office of the Comptroller of the Currency
The Office of the Comptroller of the Currency is a US federal agency established by the National Currency Act of 1863 and serves to charter, regulate, and supervise all national banks and the federal branches and agencies of foreign banks in the United States...
("OCC"), an agency in the U.S. Treasury Department, pursuant to the National Bank Act. The inclusion of the word "National" in the bank's name or the designation "National Association" or its abbreviation "N.A." is a required part of the distinguishing legal title of a national bank, as in "Citibank
Citibank
Citibank, a major international bank, is the consumer banking arm of financial services giant Citigroup. Citibank was founded in 1812 as the City Bank of New York, later First National City Bank of New York...
, N.A." Many "state bank
State bank
A state bank is generally a financial institution that is chartered by a state. It differs from a reserve bank in that it does not necessarily control monetary policy , but instead usually offers only retail and commercial services.A state bank that has been in operation for five years or less is...
s", by contrast, are chartered by the applicable state government (usually the state's department of banking). The Federal Deposit Insurance Corporation
Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. , the FDIC insures deposits at...
(FDIC), insures all deposits at both national and state banks.
The advantage of a National Bank Act charter is that a national bank is not subject to state usury laws intended to prevent predatory lending. (However, see also Cuomo v. Clearing House Association, L. L. C., stating that federal banking regulations do not pre-empt the ability of states to enforce their own fair-lending laws.) There is currently no federal cap on rates. The federal government only requires that whatever rates, fees or terms are set by issuers be disclosed to the consumer in accordance with the Truth in Lending Act.
Notwithstanding the name, not all "national banks" have nationwide operations. Some "national banks" have operations in only one city, or county or state. "National banks" should also be distinguished from federal savings associations (which include federal savings and loans
Savings and loan association
A savings and loan association , also known as a thrift, is a financial institution that specializes in accepting savings deposits and making mortgage and other loans...
, and federal savings bank
Federal Savings Bank
A federal savings bank is a savings and loan association federally chartered in the United States. They are chartered and regulated by the Treasury Department's Office of Thrift Supervision....
s, FSB), which are financial institutions chartered by the Office of Thrift Supervision
Office of Thrift Supervision
The Office of Thrift Supervision was a United States federal agency under the Department of the Treasury that charters, supervises, and regulates all federally- and state-chartered savings banks and savings and loans associations. It was created in 1989 as a renamed version of another federal agency...
, another agency in the U.S. Treasury Department. The Federal Reserve
Federal Reserve System
The Federal Reserve System is the central banking system of the United States. It was created on December 23, 1913 with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907...
is the United States central bank.