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WEEK TEN
TOPIC: ECONOMIC INSTITUTIONS
Meaning of Economic Institution: An economic institution is an agency which engages in the process of production, distribution and consumption of goods and services in the society.
Economic institutions include, the Nigerian Stock Exchange, the Central Bank, Insurance companies etc.
TYPES OF ECONOMIC INSTITUTIONS
- Banking Institutions: Banking institutions are economic institutions that render money and financial services to people and corporate organizations in the society. The banking institution include commercial banks, central bank of Nigeria, development banks etc.
- Commercial Bank: Commercial banks are financial institutions that keep money and other valuables for individuals and firms in the society. They are established by individuals for the purpose of making profit. Examples are First bank, Zenith bank, Skye bank, UBA, GT Bank and many more others.
FUNCTIONS OF COMMERCIAL BANK
- They keep money and other valuables; the primary function of commercial banks is safe-keeping of money. They equally keep jewelries and documents for their customers.
- They lend money to customers: Banks lend money in form of loans or overdraft. Only customers operating current accounts have access to major loans and overdrafts.
- They act as Agents of Payment: Commercial banks make payments on behalf of their customers. Such payments could be electricity bill, telephone bill or any other regular payments which the customer has given them a standing order to pay.
- Financial Advice: Banks give financial advice to their customers on any business proposal. They are times carry out feasibility studies to ascertain the level of profitability of the business.
- They provide foreign exchange services: Banks buy and sell foreign exchange (currencies) for their customers.
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