It is not a secret that almost 70% of the Bank assets are financed by depositors whereas the shareholders (equity) have financed only less than 10%. This scenario has made the Banking industry, highly leveraged & fragile. Due to this fragility and associated vulnerabilities the existence of the industry would be heavily dependent on the integrity of Banks and the confidence that the depositors would place on Banks. Confidence of depositors and integrity of banks are complementary and supplementary thus one cannot exist without each other. On the other hand Banks are considered as center points of exchange of money throughout the economy, as the Bankers mobilize deposits from customers, engage in lending, facilitate payments systems and coordinate financial transactions including cash management etc.
