UCSP UNIT 12: Non-State Institutions

Non-State Institutions

Are groups and organizations which operate outside the support of any state or government.

Non-State Institutions

They are referred to be ‘stateless’ since they are considered to be independent of any state, although, they usually collaborate with the government in implementing projects.

Non-State Institutions

Assume different functions and focus on a specific objective. In general, they develop certain services needed by members of the society for their progress.

Non-State Institutions

Are groups and organizations which operate outside the support of any state or government.

Bank

The term ________ has no single definition for many authors have provided their own definition of it.

Bank

_________ as a financial institution licensed to provide several financial services to different types of customers.

Bank

_______ are in operation mainly for their deposit and lending function. Customers are allowed to deposit their money to banks which grow through an interest rate.

Bank

__________ also provide loans, at a higher interest rate, to customers who need money either for personal consumption or for investment and businesses.

Financial Intermediation

This process of taking in deposits and lending them to customers in need is called __________. This means that the bank serves as a connecting link between its depositors and borrowers of money.

Custodian

Banks also act as a _________ of customer’s money, which help guarantee the safety of each deposit. When a person puts his money in a bank, the amount given is maintained in a deposit or savings account which prevents the risk of theft and robbery.

Electricity and Water

Most banks also accept payments to house and other utilities such as _______ and ________ utility. This function of the bank eases the transaction of its customers with utility companies.

Currency Exchange

Other bank functions include ___________, allowing customers to convert foreign currencies to another currency they need and safety deposit boxes, which provides customers a safe place to keep their priced possessions (e.g. gold, silver, or jewelries).

A retail bank is a type of bank that focuses on consumers or the general public as its

customers. One’s personal bank account, like checking and savings account, are usually

in a retail bank. Retail banks can be considered to be the most common and

widespread of all the types of banks.

A commercial bank also provides the same services as a retail bank; however, it

focuses on businesses and businessmen as its main customers. Commercial banks

provide short term loans for businessmen to be used for investment purposes.

An investment or an industrial bank provide medium and long-term loans and

deposits to business industries.

Agricultural banks, as the name suggests, caters to the financial needs of farmers and

the farming industry. They provide short-term and long-term loans to facilitate

agricultural activities. Loans from this type of bank is used for buying seeds, fertilizers,

land, or any materials needed for farming.

The central bank is the main financial institution in a country since it supervises the

monetary system in the country. It functions as a regulating institution to all other

banks in a country and it issues all the bank notes (or money bills) and coins of the

country in which it operates. The Bangko Sentral ng Pilipinas is the central bank of the

Philippines. A central bank is the only banking institution established through a special

law of the government, which makes the government of great influence to its central

bank.

A corporation is an organization, created by a group of people known as shareholders, which

is legally recognized to act as a single person in carrying out certain goals and objectives.

As a

‘legal person’, a corporation is mandated to enjoy the rights, privileges, and responsibilities of

an individual. Using its own name, a corporation has the right to enter into contracts, to hire

employees, and to loan and borrow money.

corporation is a distinct and separate entity from the people

who own it. This enables the corporation to have powers and liabilities of its own.

Any debt of

the corporation is the responsibility of only the corporation itself; shareholders cannot be

personally held accountable for these debts.

This feature also enables the corporation to sue

and be sued in behalf of its name. Any lawsuits directed to the corporation is solely the

responsibility of the corporation itself and not of its owners.

A business corporation is created to operate and to generate profit. Companies like

McDonald’s and Starbucks are examples of a business corporation.

A non-profit corporation is established with a purpose of serving the public rather

than pursuing profits.

A corporation whose income is taxed through the corporation itself is a C-corporation.

An S-corporation is taxed through its shareholders. An S-corporation can only have

less than 100 shareholders, unlike a C-corporation which can have an unlimited

number of shareholders.

financial intermediation in a bank allows the institution to issue loans to borrowing

customers (individual or group) who need money for their investment, at a higher interest

rate.

This loan will, then, facilitate businesses and investments. In short, loans from the bank

will keep businesses going. Continued operation of businesses leads to greater chances of

generating more income for the business and increasing employment. More income would

entail more savings to be deposited in a bank which will be used to lend to future customers.

bank plays a role in facilitating the cycle of expediting

investments and generating more income and savings.

corporations are set to provide a myriad of products and services that help people in different ways. These products and services would not, however, be possible if not with the help of several workers employed by these corporations.

Bill Gates is one of the brilliant entrepreneurs who established the world’s most

successful software business. Together with his business partner Paul Allen, they

were able to dominate the market through their innovations in technology. In time,

his company has become one of the largest corporation in the world.