BANKS IN CANADA by Rick Weiss

Canadian Chartered Banks form a major part of the financial web in this country. They act as the medium for the majority of individuals' savings, and arrange lending facilities for individuals and businesses alike. Chartered Banks are the predominant deposit taking institutions in Canada. In total, Canadians alone hold over 31 million personal savings accounts. These deposits are important to the money supply of the country as they form the basis of funding to meet the wide ranging credit needs of the nation's borrowers - both business and consumer.

So it is beneficial for the consumer and the country to deal with a bank. In fact, people have been dealing with banks in Canada for more than 160 years. Currently, the banking industry in Canada offers in excess of 7,000 branches coast to coast.

But who regulates this intricate and complex industry? The Federal Government, operating under the provisions of the Bank Act, provides the industry's policing. To keep current economically and socially, the Act is evaluated approximately every 10 years. Recent changes have concentrated on the providing of Insurance products through the extensive branch network of the Banking Industry. Also, in 1987, the Bank Act changed to allow Chartered Banks to be more participative in investment advice and portfolio management services. Most of the Chartered Banks associated themselves with a major Brokerage House and expanded their delivery network.

A major change occured in 1980, which had an impact throughout the industry: Schedule "B" banks were introduced. These include all foreign and Canadian owned Banks and Trust companies whose shares are controlled by a single or small number of shareholders. They differ from Schedule "A" banks, Charter Banks, whose shares are widely traded on the major stock exchange, and where no one interest may hold more than 10 percent. There are about 8 schedule "A", and 55 schedule "B" banks in Canada today. As mentioned earlier, bank deposits make up the major portion of the official money supply in the country. These deposits, subsequently, are used to fund loans to businesses, farmers, and individual consumers. Some of these monies are also used to finance development in other areas of Canada. Since the primary business of banks is to make loans, attracting these deposit dollars becomes a very important function. The banks encourage Canadians to save by providing a unique range of deposit and personal services. It is a well known fact that Canadians, as a group, are a nation of savers. There are more personal savings accounts in Canadian chartered banks than there are people in this country. Once you make the decision to deal with a bank, take your time and choose your deposit vehicle carefully. Talk to the banker. Ask about interest rates and the different benefits the various types of accounts can offer. The banks handle such large volumes of transactions so effectively that Canada is regularly complimented on having one of the most efficient banking systems in the world. The banking industry is an important one in Canada.

This article was originally published in Cross Cultures Magazine in Volume 1 - Issue 3 - 1992. Unauthorized copying, distribution or other usage without express written permission of the publisher is prohibited.