The
main use of the commercial zone in urban city centers is for shopping purposes.
In order for a person to purchase the items that they want and need they must
first visit a financial institution to get the required money. However, this
may not always be the case; sometimes persons may run out of money while
shopping and then must tap into their saving to get what they need or want.
Banks
to me are tall, confined spaces that are quite boring as they usually contain long
lines and this causes you to take forever to make your transactions. However,
although this is the case, I would admit that it is one of the safest places
for me to keep my money as compared to storing in it one of my draws or
underneath my mattress (grandparents method of savings). Paired with this is
the constant dilemma that I face every time I walk through urban areas of
whether I should spend my money or save it for further purposes.
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Demonstrated
in the image above is one of the major financial institutions located in the commercial
center of Arima.
Commercial
banks, according to Kelvin Sergeant, contain more assets than any other
financial institutions in the city center and sometimes even more than central
banks (2001). These banks mainly promote growth and development of the
commercial zone and hence the city center. This is through the process of
lending, investments, generation of employment opportunities as well as
expansion (Sergeant 2001) and this allows for the continuing success and income
generation of commercial zones in the urban center. This is as banks in
commercial zones ensure that there is a constant market (Demirgüç-Kunt and
Levine 2001) to produce the good and services needed in the city center.
Firstly,
banks can be defined as, “financial institutions with current operations consisting
of accepting deposits from the public and issuing loans (Slideshare 2014). This
main feature is what distinguishes it from other types of banks such as merchant
banks, saving banks, credit unions, finance houses and building societies
(ibid).
Select the following link to learn more about
the importance of banks to the economy: http://www.slideshare.net/RChengeta/importance-of-banks-in-an-economy
Secondly,
it can be stated that banks have 3 major benefits to the economy and thus the
commercial zone and city center. They are seen to lead to further development of
an establishment or an individual. They allow persons or businesses to purchase
items that could not have afforded as well as make the repayment of this money
easy through financial plans that allow a person to repay them over a long
period of time (Wise geeks 2014). However, persons must also pay back an
interest to the bank for the sum of money borrowed.
Another benefit of banks is that
they keep persons’ money safe. This is as there is a limit as to how much money
a person can withdraw from the bank at any one time thus limiting the amount of
money a person has to carry on them personally or at home (ibid). Instead, the
money is kept in the bank where there 24/7 security and other method put in place
to keep individuals and businesses’ money safe.
To read more about the importance of commercial
banks, select the following link :http://www.wisegeek.com/what-is-the-importance-of-commercial-banks.htm
Likewise,
commercial banks make day to day financial functioning of businesses in
commercial zones much easier. This is as all business transactions are carried out
using a bank account that was created that directly links the business to the
banking system. This is also aided with a bank representative that works closely
with business to ensure that they are maintaining their finances properly and
entering the books accurately (Miriam C 2014). This person also helps companies
with payroll as well as offering benefits to company employees such as retirement
saving (ibid).
On the other hand, it should be
noted that although commercial banks have many pros, there is one major drawback
involved in commercial banking. This is relating to the fact that accounts for
commercial banks are way more expensive than traditional banking means (Miriam
C 2014). They charge various fees for their services such as night deposits,
payroll services and even when they have to process a certain number of checks
for a company (ibid). In addition, some small scale business such as those
found in commercial zone may not qualify for some of the banks services but
still have to pay them as they have a commercial banking account.
To read more about the major advantage and
disadvantage of commercial banking, click the following link:
The banking sector in Trinidad and
Tobago:
The
Banking sector of Trinidad and Tobago includes all commercial banks that have
the license to carry out banking procedures as well as non-financial
institutions that that also have the license to conduct financial processes in
accordance with the Financial Institutions Act of 2008 (Central Bank of Trinidad
and Tobago 2014).
The
majority of the banks under this sector such as Scotia Bank, Republic Bank,
First Citizens Bank and Royal Bank also have operations in other Caribbean
islands.
These banks are allowed to conduct two main roles: 1. Accept deposits
that are repayable on demand and 2.Grants loans for periods of time that exceed
the one year time limit (ibid).
To find out more
about the Central Bank of Trinidad and Tobago, select the following link:
Conclusion:
Financial
institutions, in particular commercial banks, are very essential in the day to
day functioning of city centers especially in terms of its commercial zones. They
led to further development and economic growth with the lending of money, they
are a safe storage space for a person’s money as well as aid in the financial functioning
of various small businesses. Although, this makes them very beneficial they
also have high fee charges on their services that can make or break a company
in the commercial zone.
To
me the bank is a very convenient stop in the commercial zone to get money in an
emergency. However, with such convenience and power of an individual to
withdraw money at any time and at any given location comes a great financial
problem. This allows persons to use money on things that are not needed or to
over spend on specific items when shopping because they know that they have
back up money on them.
References:
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Central-bank.org.tt.
2014. "Banking Sector | Central Bank of Trinidad and Tobago.". http://www.central-bank.org.tt/content/banking-sector
(accessed 2 Apr 2014).
Demirgüç-Kunt,
Aslı and Ross Levine. 2001.Financial structure and economic growth.
Cambridge, Mass.: MIT Press
Homer, Louis B.
2012. "Central Bank is born With Independence...." Trinidad
Express Newspaper, May 27.
Sergeant,
Kelvin. "The role of commercial banks in financing growth and economic
development in Trinidad and Tobago and the Caribbean: a perspective." In 33th
Annual Monetary Studies Conference, St.Augustine: University of the West
Indies, 2001.
Slideshare.net.
"Importance Of Banks In An Economy." 2014.
http://www.slideshare.net/RChengeta/importance-of-banks-in-an-economy (accessed
7 Apr 2014).
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