Banking services

Date: 2015-10-07; view: 439.

Types of banks

Money and its functions

Unit 6 Money and banking

Money is anything used by a society to purchase goods, services or resources.

Today the most commonly used objects are metal coins and paper bills.

Money has 3 functions: Medium of Exchange (work, goods), Measure of Value (yardstick), Store of Value (money may be held and spent later)

A bank is an institution that deals in money and provides other financial services. Banks are at the hart of any financial system.

Banking is the business a bank engaged in.

Central bank is (NBU/ British) responsible for issuing banknotes.

Commercial bank deals directly with the public. Its offers wide range of services such as accepting deposits, making lawns, managing customers account. The aim of commercial banks is to earn profit.

Merchant banks do not deals with the public. They provide services for companies.

Investment banks are firms that control the issue of new securities. Also exist saving banks.

The most wildly used banking facilities are: credit card enables the holder to buy goods and repay the credit card issuer at a later date. A loan . A mortgage is a loan to buy property. An overdraft is a loan made by a bank to a customer so he/she may take out more money than its actually in bank account.

Direct debit is a system of paying bills, by having money automatically transferred from a bank account.

Most banks offer a foreign exchange service it is the facility to change money from one currency to another.