CHAPTER ONE
INTRODUCTION
A bank could be described as a major financial institution, other such institution include finance house, insurance companies, mortgage companies etc. the main function of these financial institution are to provide financial support to those who are in need. Apart form this function, banks perform other functions like rendering advice and counseling, acceptance of deposits, provision of loans and advances of providing a safekeeping place for people valuable many banks plays intermediary roles in the financial sector of the economy which focus primarily on the following.
1. Moderation of the rate of inflation
2. reduction of pressure on the external sector so as to achieve a sustainable balance of payment positions.
3. establishing the Naira exchange rate in Nigeria
a. Central bank
b. Commercial bank
c. Merchant bank
d. Development bank
e. Community bank.
Obviously, with an observer first contact with a developing economy, all those categories of bank plays crucial roles in stimulating the economy. They deal with members of the public. Firstly, they all provide first information and investment advice to willing customers community banks for instance, were established primarily to spread banking services to the grass root, considering the fact that a greater percentage of the country’s population reside in the rural areas.
Development banks by implication tend to carry out their function effectively because they diversify into specialized areas such as agricultural and industry. Example of development bank are the Nigeria Agricultural and industrial development (NACB) and Nigeria industry development bank (NIDB). Hence the development of economy is stimulated through these agency function.
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