Commercial Bank
What is a Commercial Bank?
A commercial bank is a financial institution that accepts deposits, provides loans and offers other banking services to individuals and businesses.
What is the main purpose of the Bank of Jamaica?
Its main purpose is to maintain price stability and support the stability of Jamaica's financial system.
What is the main purpose of the Development Bank of Jamaica?
Its main purpose is to support Jamaica's economic development by helping eligible businesses and productive projects access financing.
State three main functions of commercial banks.
Accepting deposits and encouraging savings.
Providing loans and overdrafts.
Processing payments and money transfers.
Why is the Bank of Jamaica called the “banker's bank”?
It is called the banker's bank because it provides banking services to commercial banks and other licensed deposit-taking institutions.
Name three sectors that may benefit from development financing.
Agriculture, manufacturing and tourism.
Who are the main users of commercial banks?
The main users are individuals, households, businesses and some government agencies.
What does the term “lender of last resort” mean?
It means the central bank may provide emergency funds to eligible financial institutions experiencing temporary funding shortages, subject to specific conditions.
Who can benefit from the Development Bank of Jamaica's programmes?
Eligible entrepreneurs, micro, small and medium-sized businesses, and other qualifying project promoters.
How do commercial banks earn income?
They earn income through interest on loans, service fees and returns from investments.
State three main functions of the Bank of Jamaica.
Implementing monetary policy.
Issuing Jamaican banknotes and coins.
Supervising licensed deposit-taking institutions.
How can the Development Bank of Jamaica help a small business obtain financing?
It can provide access to financing programmes and partial loan guarantees through participating financial institutions, which may help eligible businesses qualify for loans.
Name two commercial banks that operate in Jamaica.
Two examples are National Commercial Bank (NCB) Jamaica and Scotiabank Jamaica.
How does the Bank of Jamaica help maintain price stability in Jamaica?
It uses monetary policy tools, including changes to its policy interest rate, to influence borrowing, spending and inflation.
Explain two ways the Development Bank of Jamaica contributes to Jamaica's economic growth.
It supports business expansion and investment in equipment and other productive resources.
It helps businesses grow, potentially creating jobs and increasing the production of goods and services.