What are Commercial Banks?

● Institutions that offer money transmission services to its customers

● Mostly joint stock companies owned by shareholders and controlled by a
board of directors

Why do Commercial banks need money?

● Payment of taxes
● Payment of reserves
● Bad debts incurred from customers
● Payment for operating expenses and payment to their shareholders

How do Commercial Banks earn revenue?

● Charging fees for services offered
● Charging for payments of use of debit and credit cards
● Interest rates charged on loans
● Buying and selling of foreign exchange

Commercial Banks
➔ Jamaica National Bank Limited
➔ JMMB Bank Limited
➔ The Bank of Nova Scotia Jamaica Limited
➔ National Commercial Bank Jamaica Limited

Functions of Commercial Banks

1. Offering loans or credit facilities to customers
2. Allowing customers to make payments of different types
3. Loans
4. Overdrafts

Accounts Offerings of Commercial Banks

1. Savings Account(Deposit Account)
● Account used to deposit money in the bank to keep it safe while
earning interest on it.- interest bearing account
 ● It is used by individuals or businesses to keep money that is not
needed for immediate use

Paid into account?

❖ Using completed credit slips or by electronic banking transfer

Drawn from account?

❖ Using withdrawal slips or by electronic banking transfer

2. Current Accounts(Checking Account)

● Provide a safe place for keeping money that is needed for immediate
or current use
● Allows for the transfer of money from one account to the other
without the use of cash

How is payment made in this kind of account?

The account holder gets:
➔ A paying in book of credit slips to pay money into the account
➔ A cheque book to allow the account holder to write cheques in payment to
others
➔ Bank cards
➔ Bank statement- the bank send you a statement of accounts to inform you
how much you have paid out, paid in and charges deducted from your
accounts and the balance

3. Fixed Accounts
● The money remains in the bank for a specified period
● The bank pays a higher rate of interest on this type of account
● The customer leaves funds in the bank without drawing from it