Meaning of Banks

Banks

This refers to an institution that accepts deposits from those who have money in excess of their immediate needs or safeguards the money, receives and advances loans to those who are in need of financial assistance.

Types of banks

1. Savings Banks

   • These are intended to provide a safe place for keeping money and promote the habit of saving among individuals, e.g. The Post Office Savings Bank.

2. Commercial Banks

   • These are institutions engaged in commercial business accepting deposits on various terms with the public and making profits by lending money to the public among other things. They include N.B.C bank, CRDB bank, Bank of Brodan, Barclays Bank, Stanbic Bank etc.

3. Central Banks

   • These are government institutions established to control, guide and assist commercial banks in the country and to provide banking services and financial advice to the government.

4. Merchant Banks

   • Merchant Banks are financial institutions that primarily provide specialized services such as corporate finance, investment banking, and trade financing to businesses and large organizations. Unlike commercial banks, they do not offer traditional banking services like savings and checking accounts to the general public. Merchant banks often assist in raising capital, providing advisory services for mergers and acquisitions, and offering financial solutions for businesses.

5. Specialized Banks

   • These serve a special type of customers and are aimed at providing a special type of services. Examples include the cooperative banks which mainly serve cooperative societies, The agricultural development bank which serves farmers, The Housing Finance Bank provides finance in buying and building houses only, Mkombozi Bank Ltd etc.