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Module RSK2601: Home: BAN1502


This subject guide provides access to the Library's key resources relevant to the modules BAN1502: Banking Fundamental Principles

Explore the different resources and contact if you need any assistance.


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What is a bank?

What is a bank?

Banks act as the backbone of a modern business and the development of any country depends on a sound banking system.  The banking environment offers a safe place to save excess cash (deposits) and supplies liquidity to the economy by lending out money. This function assists the economy and organisations to grow and expand.  Banks primarily make money by charging higher interest rates on their loans than what they pay for deposits.


A bank can be defined as a financial intermediary whose core function is to provide loans to borrowers and collect deposits from savers.  By carrying out the intermediary function banks collect surplus funds from savers and allocate them to people/organisations with a deficit of funds (borrowers). The intermediary function can bridge the gap between borrowers and lenders and reconcile their often incompatible needs and objectives.


Banks are deposit taking institutions. One of the key factors that distinguish banks from other financial institutions is that they have the ability to create money. They can lend out more funds than what they have on deposit. Banks are very important and relevant to the government and the Reserve Bank for the implementation of the monetary policy.


What is the overview and purpose of the BAN1502 module?

The field of banking is extremely dynamic and challenging. The learning content and activities contained in this module will therefore provide you with opportunities to explore the developments in this field and help you to discover the field of banking as it is practiced today in a banking environment.

The purpose of this module is to develop students’ basic understanding of banking and its role in the payment, savings and investment system of an economy. In particular its aim is for students to acquire further knowledge of the fundamental principles in banking, including policies that affect the financial services sector, and to develop a deeper understanding of the products and services offered in the banking industry.

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Subject Guide

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Melanie Malan
Library 6-16, Muckleneuk Campus

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