Agency 9: Commercial Bank

15 min read

The Commercial Bank Agency is the ninth agency in the community. The agency supports participants’ access to the tools of trade needed to run successful businesses, facilitating inventory and accounts receivable factoring, and acquisition of equipment.

Central buildings, storehouse in the background

The agency is so named because the primary target of its services is commercial enterprise, as opposed to the Community Bank, (agency 7), which provides personal banking services to participants. The agency is part of the Economic Bureau, which anchors the community’s economic system. Other agencies in the bureau are Community (7) and Capital (8) Bank agencies. The agencies in the bureau are responsible for developing and running the community storehouse and its mirror.

The Commercial Bank Agency receives funds in the form of investment from the Capital Bank Agency (agency 8), which it then uses for its operations, including capitalizing the loans it offers, and other chargeable services to participants. From the revenues the agency generates, it is able to honor its obligations, including paying a return to the Capital Bank for capital invested. The agency is therefore geared to run on a profit, while delivering quality and affordable services.

The Economic Bureau is the community’s repository. It stores the community’s resources and leverages them to enhance access, and to enable the community to derive maximum benefit. The bureau forms the core of the community econosystem, which anchors the community’s aim of providing sustainable prosperity for all. The bureau’s agencies have specific responsibilities in developing and running the community storehouse.

Roles of the bank

To achieve its mandate, the Commercial Bank Agency performs the following roles:

  • Provides banking services and loans to the third column agencies
  • Facilitates factoring services
  • Business banking
  • Participates in storehouse management
  • Owns and licenses all IP and resource extraction rights

Loans and banking services

Community agencies are grouped into three columns of 8 agencies each. The agencies in a column are grouped based on the alignment of their responsibilities to the community as well as the level of collaboration between them. The Commercial Bank is part of the third column. The agency provides banking services and loans to agencies in its column. It also provides these services to village and district presidencies which serve agencies in the columns, such as village presidencies for business operations, or district presidencies for recreation and arts. The provision of banking services and loan facilities can be summarized as follows:

Agencies banking with Community Bank (agency 7)Agencies banking with Capital Bank (agency 8)Agencies banking with Commercial Bank (agency 9)
Human Relations (agency 1)Stewardship (agency 2)Business Operations (agency 3)
Health and Nutrition (agency 4)Life Planning (agency 5)Recreation and Arts (agency 6)
Communication (agency 10)Bylaws and IT Infrastructure (agency 11)Public Relations (agency 12)
IP (agency 13)Legal (agency 14)Audit (agency 15)
Accounting (agency 16)Data and Publishing (agency 17)QHSE (agency 18)
Business Planning (agency 19)Marketing (agency 20)Risk Management and Underwriting (agency 21)
Cropland and Pastures (agency 22)Community Land and Utilities (agency 23)Raw Materials and Transport (agency 24)

In the villages and districts, presidencies access banking services as follows:

Village/ District presidencies banking with Community BankVillage/ District presidencies banking with Capital BankVillage/ District presidencies banking with Commercial Bank
Village presidency for human relationsVillage presidency for stewardshipVillage presidency for business operations
District presidency for health and nutritionDistrict presidency for life planningDistrict presidency for recreation and arts

The bank provides agencies with loans to acquire or develop assets, which they then use to serve participants. For instance, the bank provides the Business Operations Agency with funds needed to buy equipment that the agency then leases out to participants. The Raw Materials and Transport Agency takes loans from the bank to develop transport infrastructure.

Facilitating factoring services

All equipment in the community, as well as all inventory and accounts receivable, are owned by the Business Operations Agency. The 96 village presidencies for the agency manage the inventory and take the loans needed to procure the said assets.

In the course of their business operations, participants frequently need factoring services for inventory and accounts receivables. When a business in the community needs inventory, it identifies and negotiates with the supplier and performs due diligence to ensure the quality is of merchantable quality. The business then applies for factoring services to the Business Operations Agency through their village presidency serving the agency. The village applies and gets a loan from the Commercial Bank Agency, and pays the supplier, though the business arranges for logistics, including delivery.

When a business sells products or services on credit, it does not need to wait for the invoice to mature. After vetting the debtor, the business applies for factoring from their village presidency for business operations. The village pays the amount of the invoice, less a factoring fee. The business is responsible for following up on the invoice to ensure that the village can recover the factoring amount, and thereafter, repay its loan to the Commercial Bank Agency.

The Commercial Bank is capitalized by the Capital Bank. This capital is used for operations, but also importantly, to determine how much the agency can lend to agencies. The higher the capital, the more loans an agency can make. The Capital Bank obtains the funds it invests in the Commercial Bank from limited partners’ interest. It pays an interest on these funds, obtained from the interest and return it receives on its investment in the Commercial Bank. The bank is therefore expected to run at a profit, with minimal chances of failure due to its access to near-perfect information.

The Capital Bank Agency uses limited partners’ interest to invest in the Commercial Bank, and in other agencies as well. The Capital Bank pays a superior return to limited partners, due to the nature of its investment to agencies such as the Commercial Bank and others. Limited partners therefore have a powerful motivation to invest as much of their net worth as possible in the community. The Commercial Bank is also keen to run at a healthy profit so that it can enable the Capital Bank to pay attractive returns, and therefore attract more investment to the Capital Bank. More investment in the Capital Bank means it can invest more in the Commercial Bank, and therefore enable it to offer more loans, and consequently, earn more interest income.

Business banking

While every limited partner maintains a checking and savings account with the Community Bank, their business transactions are handled by the Commercial Bank. The bank is uniquely placed to help coordinate business transactions between businesses and between businesses and community agencies, villages, and districts. Funds kept in a participant’s business account are used for paying factoring fees, rent, logistics, and other business-related activities, with other transactions being handled through their personal accounts.

Despite holding accounts with the Commercial Bank, participants’ primary banking services are offered by the Community Bank Agency. It is with the agency that participants maintain their checking and savings accounts and term deposits.

Storehouse

The community storehouse is a complex that includes several social amenities. At each of the four corners, there is one of the following: a theater, a concert hall, a recreational center, or a sports items store. In between these, there are large retail stores. Within the storehouse, there is a stadium and a farmers’ market. The facilities are developed and run by the Community and Commercial Bank agencies, with capital from the Capital Bank and loans advanced by each bank to itself.

The Community Bank handles the amenities located at the corners. the Commercial Bank, on the other hand, handles the stadium, the farmers market, and the retail stores. The banks lease the facilities to limited partners who run hosting businesses. The hosts in turn lease the space to tenants, and coordinate regular maintenance, including cleaning and routine repairs. The banks handle more intensive repairs and maintenance as needed.

Community bankCapital BankCommercial Bank
Corner facilities – theatre, recreational center, concert hall, and sports storeProvides capital that Community and Commercial Banks use to issue themselves loansStadium, farmers’ market, and retail stores located in between corner facilities

The Commercial Bank contracts professionals to build the facilities and thereafter leases them to other contractors for management. The contractors who lease are responsible for ensuring that businesses that want to hold events in the venues, or run businesses, are facilitated sufficiently by having well-maintained premises.

Ownership of IP and resource extraction rights and claims

The IP Agency (agency 13) helps innovators in the community to pursue and register their innovations. After processing patents and other intellectual property, the innovator sells their IP to the Commercial Bank. The bank uses its unique position to leverage IP, by licensing it out to other participants, in the process paying the originator a fee. The innovator retains the first right of refusal: they pay the bank to use the IP, at a rate of 1% of all profits earned by utilizing the IP. Other users pay the bank 4%. 2% of this is retained by the bank, with the innovator receiving the other 2%.

As is the case with IP, the Raw Materials and Transport Agency (agency 24) helps participants as they endeavor to establish the presence and viability of resources to be extracted. The agency provides technical expertise through its system and accredited contractors. Once a participant has established their rights to a resource, the agency approves their claim. Thereafter, the prospector/ discoverer sells their claims to the Commercial Bank Agency, but retain the first right of refusal. If they use the rights, they pay the bank 1% of extracted resource. If another business uses the claims, it pays the bank 4% of resource extracted. The bank retains 2%, with the other 2% going to the prospector.

How the agency works

Background on presidencies

Every presidency in the community presidency is a four-member entity whose members represent one of the four major demographics: married men (A), married women (B), single women (C), and single men (D).

These four major demographics are evenly split in ordinary society, with each group accounting for between 23 and 27% of the population, and with regular fluctuations as people’s status changes. The community appreciates that discrimination across all social categories happens based on marital status, other social categorizations notwithstanding married men are likelier to dominate other demographics, especially single men and single women. Married women are also likelier to have better outcomes in careers and leadership than single women.

The community’s infrastructure promotes equal access to economic and social resources and opportunities. The composition of the community as a whole and those who serve it in the community public service is closely monitored to prevent numerical domination, which can lead to nepotism or unequal access.

Besides marital status, the recruitment to be a participant, and to serve in the public service carefully considers other social categorizations, to ensure racial, ethnic, religious, and sexual groups are well represented in the community as they are in the society in which a community operates.

Even though presidents represent a specific demographic, they serve the whole community. Therefore, their identification with a demographic is purely for the purposes of representation.

Executive presidency, bureau board, and demographic presidencies

The Commercial Bank Agency is served by an executive presidency, comprised of 4 presidents from the four major demographics,((These demographic groups are married men (A), married women (B), single women (C), and single men (D).)) which handles strategy formulation and adjustment, as well as formulating and communicating operational procedures for the agency. Additionally, the presidency also facilitates the setting up of the agency’s automated system and adjusts it as necessary to better achieve its goals.

As part of the Economic Bureau, the executive presidency forms a bureau board with executive presidencies serving the Community and Capital Bank agencies. The board acts as a check and monitoring tool for individual presidents and agencies, especially when decisions have far-reaching implications for the community.

Within the bureau board, three presidents from the same demographic form a demographic presidency. There are four such presidencies in the bureau. The demographic presidency works on matters of common interest to a demographic, that cut across the three agencies. The demographic presidency also plays an important role in the mentorship and training of new presidents.

Demographic presidency ADemographic presidency BDemographic presidency CDemographic presidency D
Executive presidency, Community Bank (7)7A7B7C7D
Executive presidency, Capital Bank (8)8A8B8C8D
Executive presidency, Commercial Bank (9)9A9B9C9D

 

Limited partners and branch presidencies

Limited partners and group council

A limited partner is the basic unit in the community. A limited person, usually above 18 years old, but sometimes as young as 16, has been admitted into the community and has invested $20,000 as partnership interest, for which they earn a return. This is regarded as one unit of partnership interest. Over time, a limited partner can add more units of partnership interest, as their business prospers. The more partnership interest units a limited partner has, the more the return they receive from the agency.

A dependent is a minor, or a person living with a disability, under the care of a limited partner. In some instances, a dependent may be a fit adult, who for various reasons is supported by community agencies, and assigned by contract to a limited partner.  Limited partners are responsible for any legal agreements that their dependents enter into, either with community agencies or other participants. Together, limited partners and dependents are referred to as participants.

Participants who are dependents, because they are still minors, can start a business when they reach 12 years of age. This allows them to save up and invest USD 20,000 into the community by their 18th birthday, and possibly as early as 16. Limited partners and their dependents reside in apartments (village buildings). Each apartment has 4 floors, with each floor containing 16 apartments.

Each floor has floor has 7 – 12 limited partners, with each limited partner having 1 – 3 dependents. Each floor therefore has around 25 residents. With four floors, each building has approximately 100 residents. An apartment building also forms a branch.

Captains and branch presidencies

Of the approximately 100 residents in a branch, around 40 of them are limited partners. The limited partners form 4 group councils of around 10 limited partners each. Each group council is diverse, containing different social groups that are reflective of the society within which a community operates. Additionally, a group contains members of the four main demographics: married men (A), married women (B), single women (C), and single men (D).

The council meets at least quarterly and provides limited partners with a platform to interact and discuss common interest matters to their demographic within their branch. One of the members of the group council serves the group as a captain. Four captains who serve the four groups in an apartment building (branch) form a branch presidency. A branch presidency’s membership is drawn from the four main demographics, for the purposes of representation.

Captains are responsible for recruiting limited partners into the community through their council and by extension, branch. The Human Relations Agency’s automated system develops a clear definition of the sort of recruits that the community needs. It then breaks it down to the most basic social organization in the community – group. The criteria and subsequent recruitment process carefully consider that group’s current composition, that of other groups in a branch, other branches, villages, and the district. Therefore, while the captain has the responsibility to recruit, their discretion is limited by what the system recommends. This ensures that not only does the community achieve and maintain balance in all respects, but it also eliminates any chance that a captain would recruit through discrimination or nepotism. 

A captain does not recruit limited partners only from their demographic. Instead, they work to ensure that their recruits are diverse, considering social categorizations, gender, and social status, in addition to demographic groups.

Captains work in concert with their fellow captains in the branch presidency, and other presidencies in a village and district to ensure that the district is as diverse as possible. They are guided by present data on how diverse their district, village, and branch are, and what needs to be focused on to improve. They are also guided by community bylaws, which expressly require diversity as shown by demographic data about a population from which the community intends to recruit limited partners.

Branch numbering

The captain serves as a service extension of the Human Relations Agency, though they also act as an interface between participants and other community agencies. Captains help participants navigate the agency’s automated system and other relevant tools used by the different agencies to deliver services. 10 branches form a village. Each of the branch presidencies also belongs to a specific branch board. Branch boards provide an additional check and balance for captains and branch presidencies. Branches are numbered based on the village’s hub, in the direction of the breezeway one-way traffic direction.

A hub is formed at the intersection of breezeways between villages. Hub buildings are used for a range of commercial activities that need to be closer to residential areas, such as daycare centers, grocery stores, and emergency centers, among others.

A branch’s number determines with whom its presidency will form a branch board. Branch presidencies 1, 2, and 3 form one branch board, as do 4, 5, and 6, and 7, 8, and 9.

Four villages make a district. The last branch presidency in each village in the community (branch presidency 10) combines with three others in their district or cluster of 3 districts to form additional branch boards. The last branch presidencies in villages 1, 2, and 3 in each district make a board. The last branch presidencies in village 4 of each of the 3 districts in a cluster also form a board.

This can be illustrated as follows:

Branch boards and branch presidencies

Besides belonging to a branch presidency and a board, every captain belongs to a demographic presidency of 3. A demographic presidency is made up of 3 captains within a board, and who serve the same demographic. The demographic presidency mainly serves an advisory function, safeguarding issues common to the particular demographic, and helping in mentorship and support for incoming captains.

The automated system is designed to help participants with all the help they need in matters related to various agencies. However, should they run into problems, captains assist them in navigating the system, or direct them to relevant contractors who help them at a fee.

Automated system

For most of its duties, the Commercial Bank works through an automated system. The agency uses this system to process loan requests. It also provides automated banking services to businesses, agencies, villages, and districts, and eliminates any necessity of the executive presidency interacting with the bank’s clients.

The management of part of the storehouse that the Capital Bank handles is also automated, with the agency automating application for contracts to manage the space, collect rent, and identify maintenance and repair needs. From time to time, the executive presidency, with the help of operational presidencies of various agencies that interact with the system, makes changes as needed to improve the system’s performance.

Contractors

The Commercial Bank Agency relies on contractors to handle aspects of its operations that the automated system, executive presidency, and branch presidencies cannot handle. Contractors build the storehouse and develop the automated system. The agency also hires contractors to help in developing strategies and operational policies, and to monitor implementation as necessary.

Participants can also hire contractors to assist them in navigating the automated system. In addition, contractors working as financial professionals can help participants make better financial decisions and enable them to make the most of the community’s economic model.

Inter-agency cooperation

The 24 community agencies form three columns of 8 agencies each. There is loose collaboration between the agencies in a column. The Capital Bank Agency is part of the second column.

The Capital Bank Agency issues loans to all agencies in its column. The agency collaborates with the Community Land and Utilities Agency (agency 23), investing capital, and issuing loans the agency needs to buy land and develop utilities. The bank also collaborates with the Legal Affairs Agency (agency 14) to draw up titles to issue to limited partners as they invest, and to govern its numerous capital investment and loan agreements with agencies, districts, and villages.

The 24 agencies are organized in rows and columns. Beyond working in their bureau (row), agencies also interact extensively within their column. An overview with links to the 12 agencies in the Human and Financial Capital Department is here, and an overview with links to the 12 agencies in the Process and Property Department is here. A more detailed version of this graphic with some historic background is posted here.

Presidencies’ offices, meetings, and quarterly conferences

Offices

The Commercial Bank Agency’s executive presidency has offices in District Building 9’s first floor, on the western side. Facing them on the eastern side are the offices for trustee presidency and Regulatory Bureau’s operational presidency serving the agency and District 9.

Trustees and the regulatory operational presidencies alternate their offices. Trustees have the offices in building 9 on Mondays and Wednesdays, while the operational presidencies use the offices on Tuesdays and Thursdays, as shown in this timetable:

Building 9/ Commercial BankBuilding 21/ Underwriting and Risk Management
MondayTrustee presidencyRegulatory Bureau Operational presidency
TuesdayRegulatory Bureau Operational presidencyTrustee presidency
WednesdayTrustee presidencyRegulatory Bureau Operational presidency
ThursdayRegulatory Bureau Operational presidencyTrustee presidency

The first floor’s layout is as follows, including other public servants who serve District 9

Working hours and meetings

All community public servants work from Monday to Thursday, from 8:00 to 8:45 in the morning. The Commercial Bank Agency’s executive presidency uses this time to interact with other public servants and in some instances, contractors. On Thursday, each presidency (four presidents serving A, B, C, and D) meets for a 45-minute meeting from 9:00 to 9:45 in the morning.

On the last Friday of each quarter, between 9:00 AM and 12:00 PM, each demographic presidency meets. The three-member presidency discusses common bureau matters that are of interest to the demographic they serve. On Saturday, again between 9:00 AM and 12:00 PM, the whole board meets, where the presidents present their input from the previous day’s demographic presidency meeting, and prepare for the quarterly conference. The aim is to have a cohesive presentation during the quarterly conference but tailored to specific demographic interests.

Quarterly conferences

Quarterly conferences are held on the last Sunday of each quarter, from 9:00 AM to 3:00 PM, with a lunch break in between. During quarterly conferences, each demographic presidency sits together in the same row.

Quarterly conferences are held in District Buildings 5 and 17. Each building has a lower and higher assembly court. The different demographic groups use the assembly courts as follows:

BuildingAssembly courtDemographic
5Lower courtMarried men (A)
5Higher courtMarried Women (B)
17Lower courtSingle women (C)
17Higher courtSingle men (D)

Branch presidencies do not attend quarterly conferences. Instead, they follow the relevant proceedings online alongside other participants.

Each of the four assembly courts has seats for 480 presidents representing the respective demographic. In the diagram below each of the 4 courts is illustrated. The ceiling of each court has an elliptical arch that enables executive presidents, who are the only ones who make a presentation during the conference, to speak without the need to amplify their voices. The 480 seats are easily rotatable to enable presidents to face whoever is speaking.

Assembly hall

Each of the four courts has an identical arrangement and number of seats. The exact arrangement of each court can therefore be illustrated using one court, in this case, building 5’s lower court that is used by married men (A).

Assembly seating

Within an assembly court, the 480 presidents are arranged in terms of demographic presidencies of 3. The Economic Bureau’s demographic presidency for married men (7A, 8A, and 9A) sits in the highlighted seats. Various district demographic presidencies also sit on the same row as indicated.

Demographic presidencies assembly hall seating