(a) Assume that you are a retail trader and want to open a current account with a branch of a commercial bank. Write out four steps to be taken in opening the account.
(b) State six services provided by a commercial bank.
Explanation
The various steps to be taken in opening current account are:
(i) Making an application to the bank
(ii) Presenting referees as required by the bank
(iii) Completing a specimen signature card with photograph
(iv) Payment of initial deposit with the paying-in-slip.
(v) Obtaining an account number
(vi) Getting cheque book
(b) Commercial banks provide the following services:
(i) Granting of loans/overdraft to businesses and individuals.
(ii) Transfer of funds through cheques and credit transfer system.
(iii) Provision of standing order services. Banks on behalf of their customers can make regular payments, such as annual subscriptions to societies and insurance premiums.
(iv) Commercial banks act as referees to customers.
(v) Commercial banks engage in foreign exchange. Customers sending money abroad or receiving money from foreigners can do so by using the banks which have branches or agents all over the world.
(vi) They also provide night-safe services.
(vii) The banks keep documents or jewelries for their customers.
(viii) Commercial banks give advice on financial matters to customers.
(ix) A customer can instruct the trustee and executor department to prepare his will and ask the bank to carry out the provisions of the will.
(x) Banks accept deposits.
(xi) Commercial banks help in the discounting of bills of exchange
(xii) They also assist in the provision of brokerage.