Back to Course

SS1: ECONOMICS - 3RD TERM

0% Complete
0/0 Steps
  1. Mining | Week 1
    3 Topics
    |
    1 Quiz
  2. Financial Institution I | Week 2
    7 Topics
    |
    1 Quiz
  3. Financial Institutions II | Week 3
    5 Topics
    |
    1 Quiz
  4. Financial Institutions III | Week 4
    5 Topics
    |
    1 Quiz
  5. Business Organisation | Week 5
    3 Topics
  6. Money | Week 6
    5 Topics
    |
    1 Quiz
  7. Channels of Distribution I | Week 7
    5 Topics
    |
    1 Quiz
  8. Channels of Distribution II | Week 8
    6 Topics
    |
    1 Quiz
  9. Business Finance | Week 9
    7 Topics
    |
    1 Quiz



  • Do you like this content?

  • Follow us

Lesson Progress
0% Complete
commercial bank

Commercial banks are financial institutions that are established as joint-stock companies with the aim of making a profit. It is a financial institution that accepts deposits, and valuables from the public for safekeeping and it creates credit by granting advancing short-term and medium-term loans to all eligible customers.

They are owned by private individuals, institutions or governments. Commercial banks are limited liability companies.

Examples of commercial banks are First Bank, GTBank, Skye Bank, Access bank, Diamond Bank, etc.

The instruments that commercial banks use to grant loans are as follows;

  • Overdraft.
  • Credit cards.
  • Call loans.
  • Cheques.
  • Discounting bills of exchange etc. 

Functions of Commercial Banks:

1. Acceptance of Deposit for Safekeeping: They accept deposits from the customer for safe custody. Deposit slips, withdrawal slips, and cheque booklets are given to customers who deposit money with the bank. The customer’s money is kept in any of the three types of accounts.

i. Time deposit/Fixed Account.
ii. Savings Account.
iii. Current Account.

2. Lending of Money: They make loans available, overdrafts, and discount bills of exchange to their customers.

3. They provide facilities for domestic and foreign remittances and such transfers can be done through ordinary mail or through travellers’ cheques.

4. They provide facilities for safekeeping of valuable e.g. Certificate, will, gold etc.

5. They provide trust services for individuals and organisations. Trust services include management trust funds.

6. They Provide Agency Services: They act as agents for their customers in the purchase and sale of securities.

7. Money Creation Services: Deposits received can be given out as credit to customers.

8. They offer advisory services to customers and finance foreign trade.

9. They also provide project finance to their customers etc.

10. Equipment Leasing: They finance the purchase of fixed assets by their customers and allow the repayment over an agreed period of time.

Responses

Your email address will not be published. Required fields are marked *

error: