Commercial Banks Functions
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Commercial banks are institutions that conduct business for profit motive by accepting public deposits for various investment purposes.
Commercial banks functions. Functions of commercial bank primary functions accepting deposits. The primary function for which the commercial banks were established is to accept deposits from the general public who possess surplus funds and are willing to deposit them so as to earn interest on it. The main functions of commercial banks are accepting deposits from the public and advancing them loans. The secondary functions of a commercial bank are as follows.
Saving deposits current deposits and fixed deposits. Commercial banks provide facility of safety vaults or lockers to keep valuable articles of customers in safe custody. The functions of commercial banks are classified into two main division. Secondary functions of commercial banks.
Functions of commercial banks. A primary functions accepts deposit the bank takes deposits in the form of saving current and fixed deposits. Commercial banks issue travelers cheques to their customers to avoid risk of taking cash during their journey. Bank as an agent.
Commercial bank function 3. Paying the insurance premium rent loan installments etc. A bank acts as an agent to its customers for various services like. Commercial banks mark significant importance in the economic development of a country as well as serving the financial requirements of the general public.
Commercial banks render some general utility services like. The deposits may be of three types. Commercial banking is the most significant portion of modern banking system. The nature of banks has changed as time has changed.
The most important functions of commercial banks are discussed below. When the bill matures the bank gets payment from the banker. Credit creation is one of the most important functions of the commercial banks. However besides these functions there are many other functions which these banks perform.
In order to earn profit the bank accept deposits and advance loans by keeping a small cash in reserve to meet the day to day needs of the customers. Functions of a commercial bank include receiving deposits disbursing payments collections safeguarding money loaning money and maintaining and servicing checking savings and custodial. Iii letter of credit. In case of current account people can withdraw deposits in part or in full at any time he likes without notice.
Collecting bills draft cheques etc.
