Banking Services PDF

2nd Term Scheme of Work Bank Services Insurance Double/Ledger Entries Single column Cashbook Double Column Cashbook Three column Cashbook BANK SERVICES MONEY AND VALUABLES What to Know!!! Meaning of Bank/Banking Types of Banks  Services rendered by Banks Types of Accounts in Banks...

2nd Term Scheme of Work Bank Services Insurance Double/Ledger Entries Single column Cashbook Double Column Cashbook Three column Cashbook BANK SERVICES MONEY AND VALUABLES What to Know!!! Meaning of Bank/Banking Types of Banks  Services rendered by Banks Types of Accounts in Banks  Ethical issues in banking  E-Banking (Digital/Online) Meaning of Bank A bank is a financial institution where money and other valuables such as: gold, certificates, wills and other vital documents are kept for safe custody until the owner requires them. Meaning of Banking Banking is the services rendered by banks. Types of Banks Commercial Development Central Bank Banks banks Mortgage Merchant Banks Bank  Central Bank It is a public institution that manages the currency and monetary policy of a country. It is known as Apex Bank and controls other banks/ This Photo by Unknown Author is licensed under CC BY-SA-NC financial institutions.  These are banks owned by private individuals, corporate organisation or Commercial government with the aim of making Banks in Nigeria profit through various financial activities.  Examples of Commercial banks in Nigeria include… Banking Services Services rendered by Commercial Banks are: 1. Acceptance of Cash Deposit: They accept cash from customers through cheques, cash slips, Automated Teller Machine(ATM) and Transfer(online). 2. Dispensing Cash Commercial banks also pay cash and cheques over the counter, through Automated Teller Machine or Point of Sale(POS) machine. 3. Loan This is when banks lend money to customers at an agreed interest rate. Assets as collateral must be provided by the customer who applies for loan.  4. Overdraft This is when a customer with current account is allowed to withdraw more than what he has in his account based on certain conditions. 5. Traveller’s Cheques Banks provide traveller’s cheques to their customers to enable them have This Photo by Unknown Author is licensed under CC BY-SA sufficient money when travelling abroad. 6. Foreign Exchange They transact ( i.e. buy and sell ) currencies with customers to facilitate foreign transactions. 7. Agent of Payment They make payment on behalf of their customers. E.g paying of bills like school fees, Electricity etc. 8. Safe keeping of Valuables They safe-guard valuables such as jewels, certificates, will, and many important documents. Other Services 9. They perform Professional advice, investment services, include: receiving and payment of dividends to their customers. 10. They make transfer and withdrawal of money from one account to another locally or internationally, buy airtime, data, pay for cables, check account balance etc all these are made easy through e-banking facilities. TYPES OF ACCOUNT BY COMMERCIAL BANKS 1. Current Account; is an account from which the owner can withdraw money via cheques, ATM or transfer at any time provided there is fund available. Money can be paid into the account using teller, cheques or slip. Cheques A cheque is a written order on a bank to pay a specific sum of money to the person named on it. There are three parties to a cheque which are; i. Drawer; the OWNER of the account. ii. Drawee; the BANK which the cheque is issued to iii. Payee; the PERSON NAMED on the cheque for payment Three Types of Cheques 1. Open Cheque: this can be withdrawn or cashed across the counter because it does not have a line across it 2. Bearer Cheque: This is a cheque that can be withdrawn by anyone who present it for payment 3. Crossed Cheque: It is a cheque with two lines drawn on it. In order words, it must first be paid into an account before you can cash it.  A Savings Account is usually operated by low- income earners or 2. Savings/Salary students. A small amount Account can be used to open such an account. The bank pays small interest rate on deposit in such account. Difference between a current account and a savings account while the current A savings account is account is suitable for suitable for salaried traders, entrepreneurs, employees, who etc who must operate receive income on a their account monthly basis. frequently.  A savings account allows limited transactions, while current account allows multiple transactions.  In a savings account, the minimum balance required to maintain the account is quite low, but in current accounts, it is more.  A savings account is an interest- bearing deposit account, but the current account is not an interest-bearing deposit account.  A savings account does not offer overdraft facility, but current account provides overdraft facility. 3. Fixed deposit Account It is an account where money is kept for a specified period before a customer can make withdrawals. The bank pays a fixed rate of interest on money in a fixed deposit account which is usually higher than the rate on the saving account. A customer must give sufficient notice to his bank if he wishes to withdraw money from a fixed deposit account.  The least period a fixed deposit can be done is 3 Months Features of a The bank pays a fixed rate of interest on money in a fixed deposit account which is Fixed Deposit usually higher than the rate on the saving Account account. A customer must give sufficient notice to his bank if he wishes to withdraw money from a fixed deposit account Ethical Issues in Banking These are moral and professional standards used to determine whether bankers have done wrong or right These Ethical Issues in Banking include: Due process must be followed in every transaction Bankers must not be involved in money-laundering Loan should not be given to clients who do not have sufficient collateral Confidential information about clients or customers must be revealed Banks should not evade or avoid taxes Banks must not manipulate their account illegally Banks must abide the regulations of the Central Bank Withdrawals cannot be made without the consent of the account holder Bank deposits must be insured in case of distress. Electronic Banking (E-Banking) This is a banking system that enables banks to provide various banking services to customers electronically. This has really enhanced banking transactions, reduced cost running banking operations and created several job opportunities for people. Was the lesson interesting?