Scribd Logo
Upload

Welcome to Scribd!

  • 2 views

    Ai Bank principle

    Uploaded by

    curiousfond212
    News 2024

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd

    Ai Bank principle

    Uploaded by

    curiousfond212
    2 views2 pages
    News 2024

    Copyright

    © © All Rights Reserved

    Available Formats

    DOC, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    News 2024

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    2 views2 pages

    Ai Bank principle

    Uploaded by

    curiousfond212
    News 2024

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 2

    Chapterone: An Overview of Banks and Their Functions provides a comprehensive look at the role of

    banks in society. The chapter begins by highlighting the importance of saving money for future expenses
    and the need for a safe place to deposit savings. It introduces the concept of banks as lawful
    organizations that accept deposits and allow for withdrawals on demand.

    The chapter goes on to define a bank according to various sources, including the Oxford dictionary,
    Webster's dictionary, and Prof. Kinley. It explains the different types of banks based on their functions,
    such as central banks, commercial banks, development banks, cooperative banks, specialized banks,
    indigenous banks, rural banks, export-import banks, and foreign exchange banks.

    The chapter delves into the different types of banking services available to consumers, including walk-in
    banking, ATM banking, online banking, smart cards, debit cards, and e-cheques. It explains the functions
    and benefits of each type of banking service, highlighting the convenience and flexibility they offer to
    customers.

    The chapter also explores the role of central banking, detailing the functions and responsibilities of
    central banks in controlling the monetary and financial system of a country. It explains the definition of a
    central bank, its functions, and its importance in regulating the volume of currency and credit in a
    country.

    Additionally, the chapter discusses commercial banking, including the types of accounts available to
    customers, such as current accounts, savings accounts, and fixed deposit accounts. It explains the
    functions of commercial banks, including accepting deposits, advancing loans, discounting bills of
    exchange, and providing various banking services to customers.

    Overall, Chapterone provides a detailed overview of the banking industry, including the different types
    of banks, banking services, and the functions of central and commercial banks. It serves as a
    comprehensive introduction to the world of banking and finance.
    The central bank acts as a banker to commercial banks for several reasons. Firstly, the central bank
    provides a safe and secure place for commercial banks to keep their reserves. This helps to ensure the
    stability of the banking system and prevents any potential runs on banks. Secondly, the central bank acts
    as a lender of last resort, providing emergency funding to commercial banks in times of financial crisis.
    This helps to prevent bank failures and maintain confidence in the banking system. Lastly, the central
    bank also regulates and supervises commercial banks, ensuring that they operate in a safe and sound
    manner and comply with banking regulations.

    The basis of credit creation by commercial banks lies in the process of deposit-taking and lending. When
    customers deposit money into their accounts, the bank is able to use a portion of these deposits to
    make loans and advances to other customers. This process of lending out a portion of the deposits
    received is what creates credit. As customers repay their loans, the bank is able to lend out the same
    money again, effectively multiplying the initial deposit and creating new money in the form of credit.
    This process of credit creation is essential for the functioning of the economy and the expansion of
    economic activity.

    You might also like