Commerce May/June 2015

Question 3

  1. Outline five functions of commercial banks.
  2.  List and explain five ways the Central Bank controls the commercial banks.



Candidates’ performed well on part (a) of the question but did not do well on part (b).  Some of the responses expected from the candidates are as follows:
            Ways the central bank controls commercial banks

(i)       special directives;
(ii)       open market operation;
(iii)       liquidity ratio, etc.