Currency, banking system



example

	RBA, the Reserve Bank of Australia, the issuer of the Australian currency.



Bank actions


bank deposit


	credit the customer's account
	keep cash in the safe

	

withdrawal


	give notes to the customer
	reduce the customer's account balance



cash management

	cancel old notes or send them to the RBA 
	increase the bank's account at the RBA with the amount of cash cancelled


	order new cash from the RBA 
	the bank's account at the RBA is reduced



inter-bank transfer, cheques

	reduce the sending customer's account balance
	increase the receiving customer's account balance

	reduce the sending bank's account at the RBA 
	increase the receiving bank's account at the RBA 



interest

	loan, reduce account balance of the customer and increase the account balance of an account owned by the bank itself.

	general account, increase the account balance of the customer and decrease the account balance of an account owned 

	by the bank itself.


	account of the bank itself the same as a normal account, however in the name of the bank's owners.




RBA actions

tax

	send cash to the RBA
	cash is retained or cancelled


	send a cheque to the RBA 
	reduce the customer's bank account
	reduce the bank's account at the RBA 

	

government salary payment, social security benefit

	credit the customer's bank account
	increase the account balance of the bank's account at the RBA 




increase money supply
	
	pay more in salaries, social security benefits, and general payments (for new ships, aircraft) than is collected in tax. 
		free payments if necessary



decrease money supply

	ensure that tax collection exceeds any amounts paid out.
