O Level Economics Banking Notes




Banking constitute the services  of financial  Institutions such as commercial  banks .loans  association  and credit  union .A  bank  is a financial  institution  that  receives supply  fund from   the public and safe  guard them  and make them  available  to  the public  on demand  .



Types of Banks


1.Merchant Banks

2. Development  Banks

3.Post office  saving Banks

4.Commercial  Banks

5.Central  Banks




Merchant Banks :


This are banks that  are specialized  in the  financing  of both  home and  foreign trade through the  granting  of loans  and accepting bills  of exchange



Development  Banks  :


These are banks that are setup jointly  by the government and businesses to provide advice and capital .These banks are mainly  concerned  with  promoting  development  purposes  . example the Cameroon development  bank


Post office  saving banks :


These  are banks   operated by the post office  .They  receive deposit or funds  from  the public  and  safe guard them  and also  make  them available to  the public  on demand   


Commercial banks


These are profit  making  privately  own financial institution  which receives  deposit  from the  public  and  safe  guard  them and also  make  them  available  to  customers on demand  as withdrawals  or loans .Commercial banks  are  public  limited  companies 


Functions of a commercial  banks


Accepting deposits

Current account

Deposit account

Lending agent

Agent of payment

4.commercial  banks safe guard the  valuables like gold  and other  documents .This means  that  they   keep this valuables for security

5.commercial  banks  distribute  banks notes and coins

6.they issue  travelers cheques to consumers

7.commercial banks  issue banks draft or banks statements to customers




5.Central  Banks


Its  a  non profit  making financial  institution  which is  publicly owned  . is  a  bank  which  carries out the  monetary  policy .

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