(a)Describe to Kola a new recruit in your office, the steps he may take to open a current account. (b) Outline four functions of the Central Bank.

Answer Details

(a) Steps in opening a current account

1. Obtain and complete an application form: Kola should collect an account opening form from the bank and fill in his personal details correctly.
2. Provide references and specimen signature: He must supply one or two referees who already operate accounts with the bank, and give specimen signatures on a signature card for verification of future cheques.
3. Submit supporting documents: He should attach passport photographs and a means of identification such as a national ID card, driver's licence or international passport, together with proof of address (utility bill).
4. Make the initial deposit: He pays in the minimum opening balance required by the bank using a paying-in slip.
5. Collect cheque book and receive account number: After the bank verifies his details and references, an account number is opened for him and he is issued a cheque book to operate the account.

(b) Four functions of the Central Bank

1. Issue of currency: It is the sole authority that prints and issues legal-tender notes and coins.
2. Banker to the government: It keeps government accounts, receives revenue and makes payments on the government's behalf.
3. Banker to commercial banks and lender of last resort: It holds the reserves of commercial banks and lends to them when they are short of funds.
4. Control of the money supply: It regulates the volume of credit and money in circulation through monetary policy tools.