What are commercial banks ?and what are their functions ?
Answers
2⃣ It performs the functions of accepting deposits from the general public and giving loans for investment with the aim of earning profit. .
3⃣ They generally finance trade and commerce with short-term loans.
A commercial bank is a type of bank that provides services such as accepting deposits , making business loans , and offering basic investment products .
Functions :-
1) Collection of Deposits - They accept deposits from their clients . The common types of deposits accepted by bank are
• Saving account deposits
• Current account deposits
• Recurring deposits
• Fixed term deposits
2) Lending of Funds - It provide loans and advances out of the money received through deposits . These advances can be made in the form of overdraft cash credit .
3) Cheque Facility - The banks collect the cheques for their customers drawn on other banks . To collect cheques banks have clearing houses .
4) Agency Functions - Bank pay insurance premium on behalf of their clients , Bank also collect divided premium , interest , pension , etc .
5) Allied Services - In addition to above functions bank also provide allied services such as bill payments , locker facilities , etc .