CIMA BA1 Syllabus D. The Financial Context Of Business - Types of banks - Notes ^{6 / 9}

These are:

1. Retail Banks (Commercial banks)

   - traditional 'High Street' banks.

2. Wholesale Banks (Investment Banks or merchant banks)

   - specialise in providing financial services to large organisations.

Types of banks

• Retail Banks:

  Retail banks provide basic banking services to individual consumers. 

  Examples include savings banks, savings and loan associations.

  Products and services include:
  - safe deposit boxes, 
  - checking and savings accounting, 
  - certificates of deposit (CDs), 
  - mortgages, 
  - personal, consumer and car loans.

• Commercial Banks:

  Accept deposits of money from the public for the purpose of lending or investment. 

  Commercial Banks provide financial services to businesses, including credit and debit cards, bank accounts, deposits and loans, and secured and unsecured loans. 

  Commercial banks in modern capitalist societies act as financial intermediaries, raising funds from depositors and lending the same funds to borrowers.

• Investment Banks:

  An investment bank is a financial institution that assists individuals, corporations and governments in raising capital by underwriting and/or acting as the client's agent in the issuance of securities. 

  An investment bank may also assist companies involved in mergers and acquisitions, and provide services such as trading of derivatives, fixed income instruments, foreign exchange, commodities, and equity securities.