Functions of Commercial Bank

Functions of Commercial Bank:

A. Primary Functions
B. Secondary Functions
C. Fulfillment of Socio-Economic Objectives

A. Primary Functions


1. Acceptance of Deposits:
i) CurrentDeposits
ii) Savings Deposits
iii) Fixed Deposits

2. Advancing Loans:
i) Overdraft facilities
ii) Cash Credits
iii) Discounting Bill of Exchanges
iv) Money at Call
v) Term Loan
vi) Consumer Credit
vi) Miscellaneous Advances

3. Creation of credit
4. Clearing of Cheques
5. Financing Foreign Trade
6. Remittance of Funds

B. Secondary Functions:

1. Agency Services:
i)  Collection and payment of credit instruments
ii) Purchase and sell of securities
iii) Collection of dividends of shares 
iv) Acts as correspondent
v) Income tax consultancy
vi) Execution of standing instructions
vii) Acts as trustee and executor 

2. General utility services

i) Locker service
ii) Traveller's Cheques and credit cards
iii) Letter of Credit
iv) Collection of Statistics
v) Acting Referee
vi) Underwriting Securities
vii) Gift Cheques
viii) Accepting Bill of Exchanges on behalf of Customers
ix) Marchant Banking 

C. Fulfillment of Socio-economic Objectives 

Besides the above, commercial banks fulfill some socio-economic objectives.