Bank Services and Insurance Overview

2nd Term Scheme of Work

• Topics include Bank Services and Insurance
• Specific topics on entries, cashbooks (single, double, and three-column) are also covered.

Bank Services

• This is a financial institution that holds money and valuables
• Includes certificates, wills
• Items are kept securely until the owner requires them
• Banking services are rendered by banks

Types of Banks

• Central Bank: A public institution managing the country's currency and monetary policy. It's the Apex Bank, controlling other financial institutions.
• Commercial Banks: Owned by individuals, corporations, or the government, aiming for profit through financial activities.
• Development Banks: Focus on fostering economic development.
• Mortgage Banks: Specialize in providing mortgages.
• Merchant Banks: Provide investment banking services.

Commercial Banks in Nigeria

• These banks are owned by individuals, corporations or government
• Examples include Access Bank, Zenith Bank, FirstBank, UBA, GTCO, Fidelity Bank, FCMB, and Sterling Bank (and others).

Banking Services (detail)

• Acceptance of cash deposits: Banks accept cash, checks, cash slips, ATM transactions, and online transfers
• Dispensing cash: Cash and checks are distributed through tellers, ATMs, and POS machines
• Loans: Banks lend money to customers at agreed interest rates with assets as collateral
• Overdraft: Customers can withdraw more than their account balance under specific conditions
• Traveler's checks: Provided to customers for sufficient funds while traveling abroad
• Foreign exchange: Banks buy and sell currencies to facilitate foreign transactions
• Agent of payment: Banks make payments on customer's behalf for bills (e.g., school fees, electricity) using standing orders
• Safekeeping of valuables: Banks safeguard valuables (jewelry, certificates, wills).
• Professional advice and investment services: Banks provide advice on investments, receive and pay dividends.
• Money transfer: Transfer money within one account or internationally, purchase airtime, etc
• e-banking: Facilitates transactions, reduces operation costs, and creates job opportunities

Types of Accounts

• Current Account: Allows withdrawal of money through checks, ATMs, or transfers.
• Savings/Salary Account: Usually operated by low-income individuals or students; allows limited transactions and pays small interest on deposits.
• Fixed Deposit Account: Money is kept for a fixed period, receiving a fixed interest rate higher than savings accounts. A certain notice period is required before withdrawal is possible.

Cheques

• A written order to a bank to pay a specific amount to a named person.
• Three parties involved: Drawer (account owner), Drawee (bank), Payee (person to receive payment)
• Types include: open (cashable without restrictions), bearer (anyone can cash), and crossed (requires a specific account before cashing).

Other services

• Professional advice and investment.
• Transfer and withdrawal of money.

Ethical Issues in Banking

• Moral and professional standards for bankers to follow in their dealings.
• Includes due process in transactions, no money laundering, and avoiding unethical client practices.
• Regulations of the Central Bank must be adhered to.