Function Of Commercial Banks ( Secondary )

The function of commercial banks are now wide and diverse. Primary discussion was last article. Now let's go to function of commercial banks with secondary functions-

Secondary banking functions of the industrial banks include:

1. Agency Services

2. General Utility Services

These are mentioned below.

1. Agency Services: Banks additionally perform bound agency functions for and on behalf of their customers. The agency services are of immense price to the folks at giant. the varied agency services rendered by banks are as follows:

(a) assortment and Payment of Credit Instruments: Banks collect and pay numerous credit instruments like cheques, bills of exchange, promissory notes etc.

(b) Purchase: Banks purchase and sell numerous securities like shares, stocks, bonds, debentures on behalf of their customers.

(c) assortment of Dividends on Shares: Banks collect dividends and interest on shares and debentures of their customers and credit them to their accounts. Function Of Commercial Banks

(d) Acts as Correspondent: typically banks act as representative and correspondents of their customers. And even secure air and ocean passages for his or her customers.

(e) Income-tax Consultancy: Banks might also use income tax specialists to organize income tax returns for his or her customers and to assist them to induce refund of income tax.

(f) Execution of Standing Orders: Banks execute the standing directions of their customers for creating numerous periodic payments. 

2. General Utility Services: additionally to agency services, the trendy banks offer several general utility services for the community as given. Function Of Commercial Banks

8 Banking

(a) Locker Facility: Bank offer locker facility to their customers. the purchasers will keep their valuables, like gold and silver ornaments, vital documents; shares and debentures in these lockers for safe custody.

(b) Traveller’s Cheques and Credit Cards: Banks issue traveller’s cheques to assist their customers to travel while not the worry of theft or loss of cash. With this facility, the purchasers needn't take the chance of carrying money with them throughout their travels.

(c) Letter of Credit: Letters of credit are issued by the banks to their customers certifying their credit worthiness. Letters of credit are terribly helpful in foreign trade.

(d) assortment of Statistics: Banks collect statistics giving vital info with reference to trade, commerce, industries, cash and banking. They additionally publish valuable journals and bulletins containing articles on economic and money matters. Function Of Commercial Banks

(e) Acting Referee: Banks could act as referees with respect to the money standing, business name and respectability of shoppers.

(f) Underwriting Securities: Banks underwrite the shares and debentures issued by the govt., public or non-public firms.

(g) Gift Cheques: Some banks issue cheques of assorted denominations to be used on auspicious occasions.

(h) Accepting Bills of Exchange on Behalf of Customers: typically, banks settle for bills of exchange, internal still as foreign, on behalf of their customers. It allows customers to import merchandise.

(i) Merchant Banking: Some industrial banks have opened merchant banking divisions to produce merchant banking services.  Please click her for primary function of commercial banks