WHEN A BILL IS NEGOTIATED TO A BANK, IT IS SAID BE
A. surrendered B. cashed C. discounted ✓ D. accepted The answer to the question is: C. discounted When a bill is negotiated to a bank, it is said to be “discounted.” This process involves the bank purchasing the bill at a price less than…
THE USE OF THE BANK RATE, CASH RATIO AND OPEN MARKET OPERATIONS CONSTITUTE
A. monetary policy ✓ B. export policy C. fiscal policy D. import policy The answer to the question is: A. monetary policy The use of the bank rate, cash ratio, and open market operations constitutes monetary policy. Monetary policy refers to the actions undertaken…
MEANING OF BANK
Bank is a commercial institution which performs various financial activities, e.g. accepting and handling of deposits of its customers. It is a body of persons who carry on the business of banking. Banks are institutions that create money and give…
MERCHANT BANKS
Merchant banks are financial institutions which perform specialised functions, such as acceptance of bills of exchange, issuance of loans for foreign trade transactions, issuance of new shares, and provision of medium and long-term loans. They are sometimes referred to as…
DEVELOPMENT BANKS
Development banks are specialised financial institutions which provide long-term credit or loan to other enterprises for capital projects. They provide loans for projects in the area of agriculture, commerce and industry. Examples of development banks in Nigeria are Nigeria Industrial…
BANK CLEARING HOUSE
Bank clearing house is an institution established by member banks to simplify exchanging and obtaining of payments for the cheques that are paid into bank branches throughout the country. The clearing system is used among banks to settle cheques drawn…
CENTRAL BANK
Central bank is the highest financial institution in a country which carries out the monetary policy of the government. It is the sole authority in the banking industry which acts as banker to the government and the commercial banks. Central…
CHEQUES
The Bill of Exchange Act defines a cheque as: “A bill of exchange drawn on a banker payable on demand.” In other words, a cheque is an order written by the drawer to a bank to pay on demand a…
TYPES OF BANK ACCOUNTS
There are three types of account which customers can open in a bank. These are current, deposit and savings accounts. Current Account: Current account is the type of bank account usually operated by businessmen and organisations and is required if…
Study Guide
