These are financial institutions that accept deposits of money

from the general public, safeguard the deposits and make them available to

their owners when need arises.


Established under the Banking Act 1968.

Functions of Commercial Banks

  1. Accepting deposits

  2. Collecting money on behalf of customers and credit this money in

customers accounts

  1. Transferring of money from individual accounts to another persons

accounts through credit transfer.

  1. Supply currency - foreign currency obtainable at commercial bank.

  2. Lending money, the banks lend loans to customers from which they earn


  1. Facilitate International Trade - issue letters of credit and undertake foreign exchange transactions on behalf of their customers.

  2. Act as trustees and executives of wills if one wants to make a will

he/she writes one and appoints a commercial bank as the trustee and executor of the bill.

  1. Provision of safer keeping of valuables like title deeds, gold, certificates.

  2. Making decision affecting development. Before advancing loan to a prospective customer, commercial banks are very careful and strict so as to give loans to invest in viable sector of the economy.

  3. Provision of saves for keeping money and other valuables over night.