Question

Describe the secondary functions of commercial banks.

Answer 1

The public deposits are used by commercial banks for the purpose of granting loans to individuals and businesses. Commercial banks grant loans in the form of overdraft, cash credit, and discounting bills of exchange. (b) Secondary Functions: Refer to crucial functions of commercial banks.

Answer 2

Secondary functions of Commercial Bank includes:

1) working as an trustee for its customers.

2) transfer of money is also one of the secondary functions performed by the commercial banks.

3) performing the duty of cheque clearance is another important work done by commercial banks.

4) sale or purchase of bonds is also a secondary function.

The works done by a Commercial bank can be classified into primary and secondary functions or works. Except the above mentioned secondary functions, the primary functions performed by Commercial banks include Accepting deposits, Making advances and Creating credit.