SS2 Third Term Economics Lesson Note – Types of Financial Institutions and Their Functions II

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WEEK 4

TOPIC: Types of financial Institutions and their functions

CONTENT:

1. Definition of a bank
2. Types of banks, definition and characteristics.

Definition of a Bank A bank is a commercial institution which performs various financial activities, e.g. accepting and handling of deposits of its customers. Bank is also a place where money and other valuables like will, jewellery, etc. are kept

TYPES OF BANKS

1. Commercial banks
2. Central bank
3. Merchant banks
4. Development banks
5. Savings bank
6. Mortgage bank

COMMERCIAL BANK

Commercial banks are financial institutions which accept deposits and other valuables from the public for safe keeping, with the sole aim of making profit. They are owned by private individuals, institutions or governments. Examples are; First bank, Zenith bank, Wema bank, Access bank etc

CHARACTERISTICS OF COMMERCIAL BANK

1. Commercial bank is a limited liability company
2. The motive of its establishment is profit making
3. They are members of the money market
4. Commercial banks are Incorporated
5. They accept deposit and other valuables.

FUNCTIONS OF COMMERCIAL BANKS

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