Question

Write short note on utility functions of commercial banks.

Answer 1

These deposits can be withdrawn only after a specific time period is completed by providing a written notice to the bank. (3) Advancing Loans: Refers to one of the important functions of commercial banks. The public deposits are used by commercial banks for the purpose of granting loans to individuals and businesses.

Answer 2

Utility functions of commercial banks are as follows:

Explanation: Commercial banks are the financial institutions who accepts deposit for the purpose of advancing the loans with the profit margin. They perform various general utility services in order to benefit their customers and these includes:

• Facility of Lockers: Commercial banks provide the facility of the lockers to their customers where they can keep the jewellery, gems and other valuable things. This prevents the risk of theft from home.
• Issue of Traveler's Cheques: This is the facility provided to the travelers to carry the cheques with them instead of money safely and easily. It provides sense of security to them.
• Funds transfer: Banks helps in the funds transfer from one bank to the other easily and quickly. Funds can transferred by various modes such as telephonically, electronically etc.

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