Commercial Banks Functions

A primary functions accepts deposit the bank takes deposits in the form of saving current and fixed deposits.

Commercial banks functions. Collecting bills draft cheques etc. When the bill matures the bank gets payment from the banker. However besides these functions there are many other functions which these banks perform. Commercial banks mark significant importance in the economic development of a country as well as serving the financial requirements of the general public.

Functions of commercial banks. Banks have developed around 200 years ago. The most important functions of commercial banks are discussed below. 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.

Functions of a commercial bank include receiving deposits disbursing payments collections safeguarding money loaning money and maintaining and servicing checking savings and custodial. A bank acts as an agent to its customers for various services like. Paying the insurance premium rent loan installments etc. Commercial banking is the most significant portion of modern banking system.

Commercial bank function 3. The main functions of commercial banks are accepting deposits from the public and advancing them loans. Commercial banks issue travelers cheques to their customers to avoid risk of taking cash during their journey. Commercial banks provide facility of safety vaults or lockers to keep valuable articles of customers in safe custody.

Credit creation is one of the most important functions of the commercial banks. 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. Secondary functions of commercial banks. Bank as an agent.

Functions of commercial bank primary functions accepting deposits. Commercial banks are institutions that conduct business for profit motive by accepting public deposits for various investment purposes. All these functions can be divided under the following heads. The functions of commercial banks are classified into two main division.

Commercial banks render some general utility services like. The most significant and traditional function of commercial bank is accepting deposits from the public. The deposits may be of three types. Iii letter of credit.

Saving deposits current deposits and fixed deposits.