Bank Services and Method of Payment

Bank services are divided into two:

 Corporate Services of Banks

• Capital Market operation: Company flotation and rotation, breakage activities registrars of company and trustees, issuing house activities
• Mergers and acquisitions
• Re-organisation and turn around operation
• Capital restructuring
• Project financing
• Investment Management
• Portfolio
• Investment trust
• Unit trust
• Loan syndication
• Debt factoring

Banking Services Includes

• Acceptances of credit
• Loan and advance (granting loan)
• Equipment leasing
• Foreign transaction that is sales and purchase of foreign currencies
• Documentary or clean bill for collection that is document of foreign transaction.
• Foreign remittances (e.g. Western Union Money Transfer)
• Letter of credit.

Payment System

Payment system can be defined as a system or mechanism for the settlement of business and personal transactions which involves the use of financial instrument and institutional arrangement.

Method of Payment

The method of payment can be divided into:

• Monetary
• Financial (paper/Plastic based instrument)
• Electronic (paperless Instruments)
• Other payment instruments.

Monetary

Currency and cash is the most acceptable and prevalent instrument in Nigeria. Nigeria is still basically a cash society in contrast to U.K. U.S.A., where the society stand cashes society. The Monetary includes foreign currency notes, U.S Dollar, British pounds sterling Euro currency, coins Dutchmark etc.

Financial

Paper / plastic based instrument like cheques, bank cheques, certified cheques, bank draft, travelers’ cheques, travel and entertainment card, cheque guarantee cards, debit and credit cards.

Electronic/Paperless Instruments

This includes Automated teller machines (ATM), automated clearing house, Electronic fund transfers, points of sales terminals, electronic fund transfer at the point of sales (EFTPS) and even credit cards.

Other Instruments

These includes prepaid cards e.g. phone cards, vouchers, luncheon voucher, petrol voucher, gift voucher, local money orders/postal orders, international money order, money transfer mail transfer and telegraphic transfer (MT + TT) (mail transfer are within the banks) bankers payment, standing order etc.

The Bank Clearing System

The banks clearing system is simply a system whereby cheques are cleared in the clearing house. The clearing house is a forum where banks meet to exchange cheques paid in by their customers and drawn on other banks.

Parties in the Clearing System

1. The collecting Bank – The Bank Of Deposit
2. The settlement bank if different from the collecting bank
3. The settlement bank (of the paying bank)
4. The paying bank
5. The clearing House
6. The settlement institution e.g. the central bank

Clearing Instrument

The instruments are as follows:

Cheques, draft, dividend warrants, Bankers payment, Interest warrant, Debit and Credit notes, direct debits and other instruments as maybe approved.