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 Form 4 business studies money and banking questions and answers

Describe methods which may be used by commercial banks to advance money to customers.

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Answer Text:
-Overdraft facilities: a customer who operates a current account with a commercial bank may require the bank to allow him overdraft on his account
-Discounting of bills of exchange/ promissory note
may request a commercial bank to discount/ pay the bill/note before maturity
-Formal loans: an individual can apply to a commercial bank for a loan
-Plastic money: Credit card holders may present such cards and have credit advanced to them by commercial banks.
-Treasury bills:Banks advance to the government on exchange of the bill or bond.


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