RESEARCH BACK UP

1.0. INTRODUCTION In the last Unit we introduced you to a brief discussion of Negotiable Instruments and went further into a detailed description of Bills of Exchange noting the importance in today’s business of this negotiable instrument. We were able to learn that examples of Negotiable Instruments include: cheques, bills of exchange, bearer bonds, bearer debentures, treasury bills, promissory notes, Banker’s draft, dividend warrants, Bank Notes etc. In this Unit we shall examine, in detail, cheques and promissory notes as they represent very important instruments you will be using frequently as students and as future managers of business. 2.0. OBJECTIVES After going through this unit, you should be able to:  List the features of a cheque;  Explain the differences between cheques and bills of exchange.  Determine a Bearer cheque from an Order cheque.  Know the significant of crossing on a cheque.  Explain the various types of cheques.  Define a Promissory...

1.0. Introduction Considering the recent distress and failure of some commercial, community and merchant banks as well as other non-bank financial institutions such as Finance houses, mortgage finance companies in Nigeria, it is high time that recruitment into the banking and finance sectors be based on professional qualifications and experience. The practice of using staff without relevant qualification but on the job experience should be discouraged. In addition to this, great emphasis should be attached to manpower training and development in the banking and financing sectors. Manpower development in sector can be described as the activities of the worker himself or his employer aimed at improving the worker’s skills and knowledge to perform his job more effectively to achieve the ultimate goal of the organisation. This is usually done through: in-service or part time training, formal (full-time) training in tertiary institutions, seminars, workshop, correspondence schools, taking p...

1.0. INTRODUCTION In this study unit, we introduce the student to Negotiable Instruments-the main instruments with which legally binding transactions are carried out in today’s world of business. In the olden days, trading as well as settlement of debt was effected by exchanging goods for goods in a system known as trade by barter. Due to numerous problems associated with this practice, modern money was invented and goods and services are now exchanges for money. An example of a Negotiable Instrument as a Bill of Exchange whose importance locally and internationally will be discussed. 2.0 OBJECTIVES After going through this Unit, the student should be able to: Explain what a Bill of Exchange means  List the parties to the Bill  Distinguish an Order Bill from a Bearer Bill  Explain the acceptance of a Bill  Discuss the discharge of a Bill  List the different types of a Bill of Exchange  3.0 MAIN CONTENT 3.1 Negotiable Instrument A negotiable instrument is...

1.0 INTRODUCTION In this unit you will learn of the micro-Finance banking institutions as provider of financial services to the under privileged (poor) of our community who are traditionally not served by the conventional financial institutions. 2.0 OBJECTIVES At the end of this unit, you shall be able to:  Discuss the need for engaging in micro-financing State ownership of Microfinance Banks  List Source of Funds of Microfinance Banks  Categorize MFBs  3.0 MAIN CONTENT The weak performance of the then community banks in Nigeria due to weak capital base, incompetent management, weak internal control, lack of deposit insurance schemes, poor corporate governance, lack of well defined operations, restrictive regulatory/supervisory requirements among other factors led to the formulation of Micro finance policy by the Central Bank of Nigeria (CBN). According to the policy there are three features distinct micro-finance from other formal financial products. These are th...

1.0 INTRODUCTION Merchant banking occupied a very important position in the banking system of many economies of the world. It is a bridge between the traditional financial services rendered by the commercial banks and the development banks. The merchant banking system is designed to provide mainly medium-term funds and if ever, long-term to the economy. The origin of this banking system could be traced to the activities of merchants in the 18th Century England. Ugwuanyi (1991: 182) gave an insight into the activities of these merchants in England thus: "these merchants, who were large and well established traders, sometimes were able to grant trade credit and financial services to their customers by accepting bills of exchange drawn by, or on their customers". He added that for this service of agreeing to be paid in future, or for using his name the merchants receive some money (discounting). This dual role of the merchants selling of goods and offering of special financial s...

1.0. INTORDUCTION Lending is concerned with granting of credit facilities to customers. The term ‘credit’ is derived from the Latin word ‘credere’ meaning to trust. Credit is thereby defined as the ability to source goods and services in exchange for a promise to pay back later. One of the Principal businesses of a bank is lending and the bulk of bank’s income comes from this source. The survival of a bank depends mostly on the efficient management of its lending portfolio. Lending involves taking risks and assessing the risk of defaults and movements in interest rates. It is a key element in the creation and maintenance of depositor relationships particularly with business firms. Every bank lending aims at three principal objectives viz: growth, profitability and liquidity. Ana appropriate aand sound measurement of risk is required in lending since it involves risk taking. For this to take place a well-conceived lending policies coupled with careful lending practices are essential to ...

1.0 INTRODUCTION In this unit you will learn that Insurance Companies are major players in the Non-Bank Financial Services sector of the Nigerian economy. They are established under the Insurance Special Ion Rind (Amendment) Decree NO. 62 of 1992 took over the function of approving and licensing of Insurance Companies from the Federal Ministry of Finance in Nigeria. They are established under the Insurance Special Ion Rind (Amendment) Decree NO. 62 of 1992 took over the function of approving and licensing of Insurance Companies from the Federal of Finance in Nigeria. 2.0 OBJECTIVES At the end of this unit, you shall be able to:  List Non-Bank Financial Institutions in Nigeria  State the Importance of the Non-Bank Financial Institutions  Distinguish between non-bank and bank financial institutions  3.0 MAIN CONTENT 3.1 Non-Bank Financial Institutions 3.1.1 Insurance Companies Insurance Companies are major players in the Non-Bank Financial Services sector of the Niger...

1.0 INTRODUCTION You would recall that, in the preceding study unit, the reasons for effective management of bank lending and credits are identified and discussed. The fundamental purpose for managing the funds under loans and advances effectively is informed by the fact that lending of funds to bank customers involves the use of the depositors’ money. Therefore, the necessary modalities must be instituted to ensure that recoveries of funds under loans and advances are managed in order to protect the interest of the depositors. This is imperative towards ensuring that the profitable operations and survival of the banks are not in jeopardy. Therefore, this study unit is used to identify and discuss the necessary steps involved in effective management of lending and credits being granted to the customers. 2.0 OBJECTIVES At the end of this unit, you should be able to: discuss lending and credit administration  mention and explain modalities for lending and credit administration  ...

1.0 INTRODUCTION In the previous Unit, we introduce the student to a major activity of banks which is Lending-its principle and cannons. In this Unit, we shall now unveil the Bank Customer and discuss further the Banker-Customer relationship. The types of accounts kept with the bank by the customer shall be briefly mentioned. 2.0 OBJECTIVES Differentiate a ‘bank’ from a ‘banker’   Define a bank customer  Explain the relationship that exist between a customer and a bank  Explain the different types of deposits in the banking system  3.0 MAIN CONTENT 3.1 Meaning of ‘Bank and ‘Banker’ The word bank or banker has been defined by various authorities like Perry, F.E. and Gilbert G. W. Perry F. E. Describes a bank as an establishment which deals in money, receiving it on deposits on demand, collecting cheques for customers and lending or investing the surplus until it is required. G. W. Gilbert defined a banker as a dealer in capital or more properly, a dealer in mon...

1.0 INTRODUCTION In this unit you will learn of a development Bank as a financial institution primarily designed to provide medium to long-term credits to the economy. The emphasis is development because it is used by developing economy to help in key areas where conventional banks have short-coming in fulfilling their traditional functions. They take over development projects and prorammes which is of socio-community based with less emphasis on profitability and more on benefits example infrastructural needs. 2.0 OBJECTIVES At the end of this unit, you shall be able to: Define a development Bank  Narrate the Histology of Development Banking in Nigeria  List Nigerian Development Banks   State reasons for Development Banking at local and global  3.0 MAIN CONTENT 3.1 Meaning and Definition of a Development Bank A development Bank is a financial institution primarily designed to provide medium to long-term credits to the economy. Generally, development banks do not...

INTRODUCTION Commercial banks are very bivalent in any economy because they tee structured to provide working capital loans to the deficit sectors of economy. They do hardly lend money on medium and long - term because of the character of their liabilities. Banking developed from the activities of the Gold Smith in the 18th Century England. This noble profession and practice that thrives on trust has developed within the contest of the following principles: The Fractional reserve principle  The public confidence principle  The principle of maturity transformation lie use of short – term deposits to finance long - term loans in the anticipation that new deposits win be made by customers)  The principle of buy low – sell high (obtain cheap deposit to lend at high interest rates). In addition to the above, the basic principles of banking include: - Maintenance of Liquidity and profitability. - Paying and receiving cheques. -Taking deposit, etc.  2.0 OBJECTIVE At the e...

1.0 INTRODUCTION One obtains with a small expenditure of either time or money, a general knowledge of business of banking. For this level of studies, information gotten is adequate for any further studies require larger work in the business of banking. 2.0 OBJECTIVES At the end of this unit, you shall be able to:  State the origin of Banking   Explain the meaning of Banking  Define bank and Banking Business  List the functions of Central Bank of Nigeria  3.0 MAIN CONTENT 3.1 The Business of Banking The term bank is derived from the Italian word bancho (Meaning bench) as the Jews in Italy kept benches in the market-place, where they exchanged money and bills. When a banker failed, his bench is broken by the populace; and we derive the term bankrupt from this circumstance. 3.2 The Concept of Banking Today, the term, bank, means different things to different people in different economies. In order to reconcile the divergent views on the meaning and characteris...