It is not difficult to imagine the vast amount of specialized, technical knowledge that senior bank officials have to master so that they can handle securities effectively.

In addition, they must have sound knowledge of the legal aspects of borrowing, and the power to give security
possessed by such different types of customers as the under-aged, the incapacitated by mental illness, solicitors, attorneys, joint-account holders, partners, limited companies, clubs, societies, trade unions, friendship societies, industrial and providential societies, mosques and chapels and other religious bodies, local authorities, executors, trustees, trustees in bankruptcy, and company liquidators.

The borrowing of money and giving of securities are only part of the problem. Senior bank officials need to be well versed in the legal formalities involved in conducting accounts and performing other banking services for all the different customers. They must have sufficient grasp of the general principles and the law, to keep up-to-date with, and benefit from latest legal decisions; to know when to disregard legal advice and rely on practical experience; and most important of all, to appreciate the risks involved, and know when to call in the legal expert for assistance. They must be experts in the laws related to the practice of trading bills of exchange, cheques, and other credit instruments. They must have good general knowledge of legal procedures related to bankruptcy and liquidation, recovery of moneys due, and relations with, and legal obligations to the police and other authorities. They should have a rather more detailed knowledge of mercantile laws, while a considerable portion of such acts of parliament as the Property Act and the various companies acts will vitally
concern them in their work.

Fortunately, in these legal matters they receive expert guidance from senior officialsat the head office, who in turn are advised by legal specialists, and the bank solicitors. Without such assistance, the task of the branch manager would be very difficult indeed.

The bank managers should be experts in financing as well.

Though they cannot, and do not pretend to have full knowledge of their customers’ businesses, they should be able to advise on such matters as financial control, the adequacy of capital structure, and methods of payment for exports. Often, customers who are brilliant specialists and masters of productive processes, find their businesses going to the wall for lack of experienced financial guidance. Thus, while not requiring detailed
accountancy knowledge of the professional expert, bankers must be skilled in interpreting balance sheets, trade accounts, profit-and-loss accounts, and financial statements generally, not only with a view to advising
customers when necessary, but also to be able to decide the extent to which the bank would be justified in lending money.

In this role of consultancy, the banker is not a competitor of the accountant. Indeed, he or she will often recommend the appointment of an accountant to the board of directors.

S/he does not replace the accountant, the lawyer, or any other professional person.

Rather s/he is the link between them and the customers.

The question that banks should always take into account is how much does the customer require to borrow? Will it be sufficient?
And what is he proposing to do with the money?
One last word about securities:
adequacy is not the only requisite for obtaining a bank advance. Even more important are personal factors, the
integrity, ability, experience, judgment, and financial resources of the borrower, and the certainty of his ability for repayment. Not long ago, before the computerization evolution in banking, many bankers asked themselves what they could say about the future prospects of banks and bankers? The answer was: bank development
should seek larger banks through amalgamations and absorption of a large number of small individual banks, a policy which inevitably led to a small number of large banks with a widespread branch system.

This philosophy was applied and led to the nationalization of banks in a number of countries, with unfortunate results. Let’s wait and see what the new generation of bankers with their e-banking, will bring next.