Project 2

Demonstrate the NBE role

The Bank has the following powers and duties:Coins, prints and issues the legal tender currency, and
regulates the country’s money supply.

- Regulates the applicable interest rate and other cost of money charges.

- Formulating implements and follows-up the country’s exchange rate policy, and manages and
administers the international reserves of the country.

- Licenses, supervises and regulates the operations of banks, insurance companies and other financial
institutions.

- Sets limits on gold and foreign exchange assets, which banks, and other financial institutions authorized
to deal in foreign exchange an hold in deposits.

- Sets limits on the net foreign exchange positions and terms, and the amount of external indebtedness
of banks and other financial institutions.

- Provides short and long term refinancing facilities to banks and other financial institutions.

- Accepts deposit of any kind from foreign sources.

- Promotes and encourages the dissemination of banking and insurance services throughout the country.

- Prepares periodic economic studies, together with forecasts of the balance of payments, money supply,
prices and other relevant statistical indicators of the Ethiopian economy useful for analysis and for the
formulation and determination by the Bank of monetary, saving and exchange policies.

- Acts as banker, fiscal agent and financial advisor to the Government.

- Represents the country in international monetary institutions and acts consistently with international
monetary and banking agreements to which Ethiopia is a party.

- Exercises and performs such other powers and activities as central banks customarily perform.

Demonstrate the bank transaction

Banking transactions means cash withdrawals, deposits, account transfers, payments from bank
accounts, disbursements under a preauthorized credit agreement, and loan payments initiated by an
account holder at a communications facility and accessing his or her account at a bank.

Identify the checking or current account advantage and dis advantage

Current bank accounts are very popular among companies, firms, public enterprises, businessmen who
generally have higher number of regular transactions with the bank. The current account includes
deposits, withdrawals, and contra transactions. Such accounts are also called the Demand Deposit
Account. A Current account can be opened in most of the commercial banks.

Advantages of having a Current or checking Account

- Current accounts allow handling of large volumes of receipts and/or payments systematically

- Under these accounts, limitless withdrawals are allowed in line with the levied cash transaction fees.

- There are no restrictions applied on the deposits made into the current accounts opened at the bank’s
home branch. Additionally, account holders can also deposit cash at other branches upon paying small
fees as applicable.

- Cheques, pay-orders, or demand-drafts can be issued via a current account for making direct payments
to creditors.

- Overdraft facilities are also available for current account holders.

- The presence of small interest earnings on account balance makes a current account all the more
attractive for its users.

- Businesses are further advantaged with various other benefits in the form of free inward remittances,
deposit and withdrawals at any location, multi-location transfer etc.

- The businessmen can withdraw from their current accounts without any limit, subject to banking cash
transaction tax, if any levied by the government.

- Assists creditors of the account holder who can have access to information on the account holder’s
credit-worthiness through inter-bank connection.

- It facilitates the industrial progress of the country. Without its help, businessmen would face difficulties
in running their businesses.

- Provides with Internet-banking and mobile-banking to enable businessmen carry out important
business transactions promptly and with ease.

- It also provides various other advantages (benefits) such as:

- Deposit and withdrawal of money (cash) at any location.

- Multi-location funds transfer.

Disadvantages of having a Current or cheking account Account

- There is an opportunity cost of losing on the interest rates due to low or zero interest on money in
current account.
- There is an operational burden attached since most package accounts offer services at additional costs.

- The involved paperwork and fine print serves to be lengthy and confusing.

- Huge fees due to corporate business transactions.

- There is a limit on the amount of funds that can be withdrawn in a day.

Identify the bank provide services for your

Banks provide bank services to attract customers, from giving loans, credit and debit cards, digital
financial services, and even personal services. However, some essential modern services are offered by
most commercial banks. The types of banking services are;

Advancing of Loans.

Overdraft.

Discounting of Bills of Exchange.

Check/Cheque Payment

Collection and Payment Of Credit Instruments

Foreign Currency Exchange.

Consultancy.

Bank Guarantee.

Remittance of Funds.

Credit cards.

ATMs Services.

Debit cards.

Home banking.

Online banking.

Mobile Banking.

Accepting Deposit.

Priority banking.

Private banking.