Question

What are the secondary functions of commercial banks?

Answer 1

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Commercial banks grant loans in the form of overdraft, cash credit, and discounting bills of exchange. (b)Secondary Functions: Refer to crucialfunctions of commercial banks. Thesecondary functions can be classified under three heads, namely, agencyfunctions, general utility functions, and other functions.

Answer 2

Secondary Functions of Commercial Banks are as follows:

1. Agency Functions: The commercial banks act as an agent for their customers and perform various functions on their behalf in exchange of service fees which includes:

1. Fund Transfer
2. Periodic Payments
3. Collection of Cheques
4. Purchase and Sale of Foreign Exchange
5. Purchase and Sale of Securities
6. Management of Portfolio
7. Letter of References
8. Act as a Trustee
9. Others

2. General Utility Functions: Apart from the above, other general services provided by the commercial banks in order to benefit their customers includes:

1. Facility of Lockers
2. Issue of Traveller's Cheques
3. Underwriting Services
4. Undertaking of Social Welfare Programme
5. Statistics Collection

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