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SubjectFree lesson

BANK SERVICES

ClassNotes Team 5 MIN READUPDATED 27 JUN 2026

BUSINESS STUDIES FOR JSS2 SECOND TERM

SUB -THEME: COMMERCE-THE HEART OF BUSINESS

WEEK 2

BANK SERVICES

Performance objectives:

The student should be able to:

    1. Define Bank
    2. State the types of banks
    3. Define commercial bank
    4. Explain services provided by a commercial bank
    5. Identify ethical issues in banking

 

Contents:

Meaning of Bank

Money can also be borrowed from the banks for business activities or for personal use. Banks play an important role in buying, selling and distribution activities in the economy.

Types of Banks

There are different kinds of banks in Nigeria. They include

  • Central Bank of Nigeria (CBN): The CBN is the government bank and it acts as the banker to other banks.
  • Commercial Banks: These are the most relevant banks to trade. They carry out their commercial activities to make a profit like any other business. Some of the commercial banks in Nigeria are  First Bank of Nigeria (FBN), Union Bank of Nigeria (UBN), Zenith Bank (PLC) Guaranteed Trust Bank (PLC)
  • Mortgage Banks: These are banks that are into granting loans to individuals and co-operate bodies for building purpose. Examples of Mortgage bank are Union Homes and Savings Ltd, AG Homes and savings Ltd etc.

 

  • Merchant Banks: These are banks which perform special functions such as accepting a bill of exchange, issuing new shares, issuing loans for foreign transaction. They are sometimes called as Acceptance Houses. Examples: Merchant Bank of Africa, First City Merchant Bank etc.

 

 

  • Development Banks: These are banks which provide long term credit or loans to other enterprises for capital projects. They provide loans in the area of Agriculture, Commerce and Industry.

 

  • Commercial Banks: These are the most relevant banks to trade. They carry out their commercial activities to make a profit like any other business. Some of the commercial banks in Nigeria are First Bank of Nigeria (FBN), Union Bank of Nigeria (UBN), Zenith Bank (PLC) Guaranteed Trust Bank (PLC)

Functions of Commercial Banks

We are going to discuss the functions of commercial banks because it’s the most common and relate to our course of study. Some of the functions are:

  • They accept deposits (money or other valuables) from customers for safekeeping
  • They lend to customers
  • They serve as an agent of payments
  • They provide financial advice to their customers
  • They facilitate international trade
  • They issue traveller’s cheque.

 

Commercial Banking Services

The most important function of the commercial banks is the safekeeping of money until the owner needs it. To save money in the bank, a person must open a bank account with a certain amount of money. If you bring in money the bank will credit your account and debit your account if you withdraw the money.

Some of the services provided by commercial banks are:

  1. Opening and Operating a Current Account: A current account is an account from which the owners can withdraw money at any given time provided there is enough money in the account. When a person wants to open an account, the commercial banks take the person through the process of opening the account. Documents needed for completion to operate a current account in a bank include:

(a) Letter of introduction or references from persons who may be existing customers of the bank or other banks. (b) A personal data form is given to him by the bank for completion.

c) Specimen signature form (d) Two (2) passport photographs to be returned with data form

 

  1. Opening and operating savings Account: The commercial banks also involved in the opening of savings account.  Savings Account is an account in which the money saved earns interest at prevailing interest in the economy at the given time. Deposits made into a savings account are not for a specified fixed period of time for the purpose of interest.

Requirements for opening a Savings Account

The following are some of the requirements for opening a savings Account

  • An identification document (a) letter from employer plus an ID card (b) a driver’s license or an international passport.
  • Evidence of permanent address-recent PHCN bill with your name on it or with a confirmation letter from your landlady or landlord.

When the account is opened, the bank will give the following documents to the customer.

i. Cash deposit booklet or slip

ii. Withdrawal forms/booklet

iii. The bank identity card

iv. A passbook

v. Automated Teller Machine Card (If customers request for it and it is at a certain fee)

  1. Opening and Operating Fixed Deposit Account: A fixed deposit account is a special account. In this account, money is kept for a specified period like six months or a year or more. Customers who have sufficient money not immediately needed for use operate fixed deposit account.

 

  1. Bank Statement: It is the practice for banks to issue a statement of account to each customer monthly, bi-monthly or on a request. The following are the contents of a bank statement.

i.   Name of the customer

ii.  Account number

iii. Payment or deposit made to the bank within a stated period

iv. Withdrawal effected within the same period

v. Bank charges for its service

vi. Balance for the stated period

vii. The address of the customer

Other banking services are:

  1. Giving Overdrafts to customers
  2. Issuing loans
  3. Issuing traveller’s cheque
  4. Operating the Automated Teller Machine (ATM)
  5. Operating E-Banking (Electronic Banking)

 

Ethical issues in banking:

The ethical challenges facing the financial service industry are:

  1. Some people equate moral behaviour with legal behaviour
  2. Some people suffer from stunted moral development
  3. Self- interest sometimes leads to greed and selfishness.
  4. Individual responsibility can wither under the demands of clients
  5. Professional duty can conflict with company demands