Discuss in detail the secondary functions of Commercial Banks.
Answers
Answer: The primary functions of a commercial bank are accepting deposits and also lending funds. Deposits are savings, current, or time deposits. Also, a commercial bank lends funds to its customers in the form of loans and advances, cash credit, overdraft and discounting of bills, etc.
Secondary functions of commercial banks are :-
➤ Discounting bills of exchange – It is a written agreement acknowledging the amount of money to be paid against the goods purchased at a given point of time in the future .
➤ Overdraft Facility – It is an advance given to a customer by keeping the current account to overdraw up to the given limit .
➤ Purchasing and Selling of the Securities – The bank offers you with the facility of selling and buying the securities .
➤ Locker Facilities – Bank provides lockers facility to the customers to keep their valuable belonging or documents safety .
➤ Pay and Gather the Credit – It uses different instruments like a promissory note , cheques and bill of exchange .