State the utility functions of commercial banks.
Answers
Answer:
Commercial banks facilitate their clients with many facilities. They have certain utility functions, i.e.
-To accept the deposits made by clients
-To lend various types of funds and loans to their clients
-They allow clients to make overdrafts
-They allow clients to make investments in their funds
-It also tends to function just like an agency
-It give advances to some clients depending on their situations and collateral.
It is at the discretion of the bank, which client will be given what treatment based on the details of their funds and collateral and amount of advance that they want,etc.
Answer:
As per the question
Utility functions of commercial banks :
* Locker facility
* Traveler's Cheques
* Letter of credit
* Collection of Statistics
* Underwriting securities
* Foreign exchange business
* Act as an underwriter
* Acting as a information provider
It takes money from a surplus unit by paying a low rate of interest and lends the same fund to deficit unit at higher rate of interest and thus profit