Question

Give any four secondary functions of a commercial bank.

Answer 1

Answer:

Explanation:

Commercial bank are financial institution which carry out various activities like accepting deposits, granting loans and also provides financial services like electronic transfer of funds and overdraft facilities.

The four secondary functions of commercial banks are as follows :

(i) Collection center of Checks:

It is the important functions carried out by the commercial banks. They collect bills of exchange and checks via clearing house facilities which is provided by the central bank on behalf of their customers.

(ii) Provides Foreign Exchange:

Commercial banks provide foreign exchange to businessmen who are in the business of imports and exports but only after obtaining the permission from the central bank

(iii) Providing Locker Facilities:

Commercial banks also provides its customers with locker facilities for safe keeping their valuable items like jewellery, shares and others items. This helps in  minimising the risk of theft at homes.

(iv) Collection center of Income:

These banks also provide services like collection of dividends, salaries, pension, rents, and interests on investments for their customers.

Hope this helps.

Answer 2

Secondary functions of commercial banks are :-

➤ 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 .