Roles Of Banks In Namibia Essay

Contents

Introduction: 2

Types of Banks: 2

Functions of Banks: 3

Benefits of Banks in Namibia: 4

Conclusion 5

An explanation of the types, functions and benefits of banks in Namibia

Introduction:

Banks are the heart of the economic structure and an economy can hardly do without them. “A bank is an establishment for the custody, loan, exchange, or issue of money for the extension of credit and for facilitating the transmission of funds” (Merriam Webster, 2005). Banks provide financial services such as wealth management, currency exchange and safe deposits. Reports indicated that “Although banks create no new wealth in their borrowings, lendings and related activities, they facilitate the process of production, distribution, exchange and

It is of course mandate of the Bank of Namibia to promote and maintain a sound monetary, credit and financial system in the country. Reports indicate that “A sound monetary system refers to a stable, reliable and acceptable currency as well as to all other payment instruments in the financial system” (Omotunde et al., 1998, p. 7). According to the Constitution of the Republic of Namibia, Bank of Namibia has the functions to promote and maintain a sound monetary, credit and financial system in Namibia and sustain the liquidity solvency and functioning of that system. It also promotes and maintains internal and external monetary. Coupled with the role of being a banker to the government, Bank of Namibia also serves as the financial advisor and fiscal agent of the government. The bank is required by law to express an opinion and to advise the government through the Ministry of Finance during the preparation of the national annual budget. The central bank is responsible for keeping the government‘s accounts as well as those of commercial banks. It is also responsible for the country’s interest rate on borrowings within the country. The central bank regulates the monetary policy by either increasing or reducing it and gives out a notification for the commercial banks. Furthermore, Bank of Namibia is in charge of printing the money and controlling money in circulation (Muharukua & Vries, 2011). It is also in charge

There are three types of banks in Namibia, the central bank(Bank of Namibia), commercial banks (FNB, Bank Windhoek, Standard Bank, Nedbank, Agribank) and a development bank (Development Bank of Namibia). All the banks have different functions such as supporting economic growth and development, acting as a fiscal advisor, accepting and keeping deposits, lending mortgages and loans and ensuring the quick availability of money through ATMs. Finally, it is worth pointing out that banks are effective partners in the process of economic