Question 1

a)Explain in detail the primary functions of a commercial bank.(10 Marks)

b) Discuss the process of money creation (destruction), using the concept of the deposit multiplier.

c)A payment system is of utmost importance in a bank for consumers, the government, the central bank and the economy at large, define and describe the following terms. Define and describe the following terms:

i)Interbank Infrastructure

ii)Electronic payments

iii)Society for Worldwide Interbank Financial Telecommunication (9 Marks)