Resource cost in banking and its effects on financial credit pricing

By the growing effect of globalization, rivalry has showed a remarkable increase in the banking area, which has a significant role in a country?s economy. Specifically in Turkish banking sector, increasing number of banks some of which have foreign capital in share has made rivalry increase more in recent years. In accordance to these developments, marketing, technological infrastructure, pricing and product diversity has started to gain special importance in addition to confidence to the banks and customer satisfaction. The concept of waiting for their customer in banking subsidiary has given place to the concept of visiting their customers in their own places. In this environment, gaining new customers while sustaining existing customer portfolio has been more difficult.Parallel to these developments, customer expectancy has changed in banking sector. Nowadays when bank customers want to use credit for trying to reduce the credit cost, she/he examines the offers from various banks and decides to use credit from the bank, which offers the lowest price. In these circumstances, for the banks, which have the purpose of only reaping profits, the importance of the low source cost has further increased. The low source cost provides maneuver flexibility and brings about high profit margin besides increasing competitive power, against their rivals.Banks have various sources, but the most important one is the bank deposit. Current deposit is the lowest source cost in the bank deposits. The importance of the current deposit has further increased in banking sector in which the rivalry exists intensively.Commercial customers are more sensible about prices comparing individual customers. The commercial customers prefer to use credit from the bank, which offers the lowest price. In this situation, the bank having the lowest source cost easily competes against the other banks.Key words: Resource Cost, Current Account, Credit, Credit Pricing.