Functions of a commercial bank

Answer 1

Commercial Bank 1. Receiving Deposits:

This is the main function of commercial banks to collect savings of individuals and firms. They offer different types of deposits for the facility of the customers.

i. Current Account or Demand Deposits:

Any amount can be withdrawn from this account any time without any notice. No interest is allowed on this type of account.

ii. Saving Account:

This type of deposit account which is usually held by the middle class group. The

saving account carries lower rate of interest.

iii. Fixed Deposit:

Amount cannot be withdrawn before the fixed future date in this type of deposit. High interest is allowed in fixed deposit which is different according to period.

2. Advancing Loans:

This is the important function of the commercial bank. Credit is given to the people in different ways.

(a.): Making Loans:

There are three types of loans given to borrowers.

i. Short Term Loans:

These loans are advanced for the period of six months to one year. High Interest rate

Is charged on this type of accounts.

ii. Medium Term Loans:

Loans from one to five years are called medium term loans.

iii: Long Term Loans:

Loans which are advanced for the period, more than ten years are long term loans.

(b.): Bank Overdraft:

Banks allows their trustful customers to draw more than the deposit they have in the

Bank. Bank charges interest on overdraft.

(c.): Cash Credit:

Bank also gives credit against immovable property and interest is charged by the

bank.

(d.): Discounting of Bills:

This is income source of bank to discount bills of exchange. They charge nominal

Interest and discount only reputed and clear bills of exchange.

Commercial Bank 1. Receiving Deposits:

This is the main function of commercial banks to collect savings of individuals and firms. They offer different types of deposits for the facility of the customers.

i. Current Account or Demand Deposits:

Any amount can be withdrawn from this account any time without any notice. No interest is allowed on this type of account.

ii. Saving Account:

This type of deposit account which is usually held by the middle class group. The

saving account carries lower rate of interest.

iii. Fixed Deposit:

Amount cannot be withdrawn before the fixed future date in this type of deposit. High interest is allowed in fixed deposit which is different according to period.

2. Advancing Loans:

This is the important function of the commercial bank. Credit is given to the people in different ways.

(a.): Making Loans:

There are three types of loans given to borrowers.

i. Short Term Loans:

These loans are advanced for the period of six months to one year. High Interest rate

Is charged on this type of accounts.

ii. Medium Term Loans:

Loans from one to five years are called medium term loans.

iii: Long Term Loans:

Loans which are advanced for the period, more than ten years are long term loans.

(b.): Bank Overdraft:

Banks allows their trustful customers to draw more than the deposit they have in the

Bank. Bank charges interest on overdraft.

(c.): Cash Credit:

Bank also gives credit against immovable property and interest is charged by the

bank.

(d.): Discounting of Bills:

This is income source of bank to discount bills of exchange. They charge nominal

Interest and discount only reputed and clear bills of exchange.

Answer 2

Commercial banks are the financial intermediaries of the economy. Most commercial banks provide the following services:

1. Savings accounts
2. Checking accounts
3. Fixed Deposits
4. Home Loans
5. Personal and Auto loans
6. Credit Cards

<<<<***>>>>

The functiions of a modern commercial bank can be classified under three heads:

1. Primary Functions;

a) Accepting Deposits.

b) Advancing of Loans

2. Secondary Functions

a) General Utility Services like safe deposit facilities, LCs, dealing in Foreign Exchange, etc.

b) Agency Services like collection of cheuqes, etc.

3. Services through Subsidiaries

a) Mutual Funds

b) Portfolio Management

c) Leasing

d) Housing Finance

e) Factoring services

4. Modern Functions

a) Telebanking

b) Credit and Debit Cards

c) Tele-banking

d) internet Banking.

e) Bancassurance

f) 24X7 Banking Service, like ATM, transfer of funds (NEFT, RTGS,), etc.

M.J.SUBRAMANYAM, XCHANGING, BANGALORE

Answer 3

Commercial banks are the regular banks that provide basic banking facilities to its customers. Some of the facilities you can get from a commercial bank are:

a. Checking/Current account

b. Savings accounts

c. Internet/Mobile Banking

d. ATM Cards

e. Check Books

f. Deposit Accounts

g. Loans

h. Credit Cards etc.

Answer 4

Commercial banks are the financial intermediaries of any nation. Most commercial banks provide the following services:

1. Savings accounts
2. Checking accounts
3. Fixed Deposits
4. Home Loans
5. Personal and Auto loans
6. Credit Cards
7. etc

Answer 5

A commercial bank is a normal bank that provides the basic banking services to its customers. Some of the different services available from commercial banks to its customers are:

1. Checking/Current account
2. Savings accounts
3. Internet/Mobile Banking
4. ATM Cards
5. Check Books
6. Deposit Accounts
7. Loans
8. Credit Cards etc.