Module 1: Types Of Retail Banks

Question 1

Commercial banks

Answer 1

Accepting deposits and providing loans
Either publicly listed on the stock exchanges or privately owned

Question 2

Savings banks

Answer 2

Providing saving products to those with ‘surplus’ money
Owned by their members or shareholders (mutual ownership - people who deposit their money with and borrow from, the bank)

Question 3

Co-operative banks

Answer 3

Owned by members
Providence deposit taking and loan products to personal customers and small businesses.
Share their profits with their members

Question 4

Building societies

Answer 4

Mutual businesses which are owned by their customers
Accept depots from savers
Main lending - mortgage loans to house purchasers
No shareholders (no dividends)
43 BS in the UK

Question 5

What is the largest building society

Answer 5

Nationwide

43 in the UK

Question 6

Credit unions

Answer 6

Non profit co-operative organisation
Owned by members who pool their savings and lend to each other

Question 7

How many credit unions are there

Answer 7

250
Internationally - under 88,000 in 188 countries

Question 8

Finance houses

Answer 8

Provide loans to their customers
Common one is hire purchase
Don’t accept deposits from customers

Corporate entity and provides instalments credit

Question 9

What is hire purchase

Answer 9

Instalment credit set up for a customer to pay off the purchase and owns the products when all payments have been made