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WEEK 1
SUBJECT: COMMERCE
CLASS: SS2
TOPIC: Banking
CONTENT:
- Meaning of bank and origin of banking
- Function of Commercial banks
- Types of Account
Sub-topic 1: Meaning of bank
A bank is a commercial institution that performs various financial activities such as accepting and handling deposits and other valuables. Simply put, a bank is a place where money and other valuables like will, jewellery etc are kept.
Origin of Banking
Banking had its origin with the goldsmiths in London in the seventeenth century. The goldsmith had facilities for storing valuables; therefore, they accepted money and valuables from Merchants for safekeeping.
The first banking function was accepting deposit of cash from merchants who had no safe place to keep their money. The goldsmith demanded a charge for looking after their money. The second stage came when receipts for these deposits were being used as means o payment by merchants. The next stage was the development of money lending to customers with interest. This provided a profitable business; hence bankers began to offer inducement of interest to encourage merchants and others to increase their deposit.
The first known formal bank is the bank of Venice, in Italy which was established in 1157 to finance the monarch in his wars. The modern bank started with the English goldsmith. In 1894, the Bank of British West Africa (now First Bank) opened a branch in Lagos while Barclays Bank (now Union Bank) was established in 1925. Many more banks came up but after the 2006 reform, 25 banks emerged and got listed in the Nigeria Stock Exchange.
TYPES OF BANKS
- Commercial bank
- Central bank
- Merchant bank
- Savings bank
- Development bank
COMMERCIAL BANKING
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